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Enough food stocks to keep prices under check: CEA on monsoon

monsoon clouds in Agartala

New Delhi: Government expects inflation to remain under control as it has adequate stocks to deal with shortage of foodgrain in the eventuality of poor monsoon, Chief Economic Advisor Arvind Subramanian said today.

“One factor that is going to affect inflation going forward is the monsoon … Because we do have adequate stocks, we will be able to contain inflation even if monsoon does not turn out to be as good,” he told reporters here.

The Indian Meteorological Department (IMD) has projected a below normal monsoon which might impact food production leading price rise.

Admitting that the “risk” to inflation is there, Subramanian expressed confidence that the government would be able to contain price rise as it did during the previous financial year.

At present, the price situation is much better with Consumer Price Index (CPI) inflation down to 5 per cent and the Wholesale Price Index (WPI) remaining in the negative territory for past several months, he said.

“CPI inflation is down at about 5 per cent, the latest reading and WPI inflation are in negative territory…the latest reading was of course (-)2.7 per cent,” he said, adding inflation was likely to remain at 5 to 5.5 per cent, as was projected by the Economic Survey.

Subramanian said the oil prices going forward will remain between USD 50-80 and there would not be much “wild swings”.

“Overall inflation is down, inflation prospects are looking good. Substantial quantity and quality of fiscal consolidation and the external situation also are under reasonable control,” he said.

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