De-hoarding and import intervention in certain sectors of food items can be useful in dampening food inflation said Kaushik Basu, chief economic advisor to the finance ministry. He also expects mild correction in the interest rates by the Reserve Bank of India as a step towards containing inflation.
?There are concerns about certain amount of hoarding. You can bring in measures there. You can bring in imports of certain products,? he said. Pointing out that there is a limit to which the country can buy from global market he said that huge import intervention is not possible for every product.
According to Basu inflation is a concern in short term as it is affecting poor and the middle class. Wholesale food prices in India touched 10-year high, with food inflation at 19.95% for the week ended December 5.
?But you can not allow short term concerns to drown out the long run aim for the country and I think it is extremely important for India to keep up a very high growth rate which India has achieved,? he said.
Maintaining that 7.75% growth rate seems achievable Basu explained that the last quarter [Q2] growth has been 7.9%.