Amidst a national strike against fuel price hike and rising prices by Opposition parties, finance secretary Ashok Chawla said on Monday that food inflation is expected fall to around 6% by December.
?Food inflation is going down. It will take some time before it really comes into a range which is acceptable to the government and which is good for the people,? Chawla said on the sidelines of a conference on state highways. He said 5-6% would be an acceptable rate of inflation.
Food inflation declined by almost 4 percentage points to 12.92% for the week ended June 19, mainly due to the base effect.
Wholesale price-based inflation, which includes variation in food prices, crossed double-digits at 10.16% in May.
The Reserve Bank of India on Friday raised interest rates earlier than expected, ahead of its July 27 policy review, to arrest rising price. Analysts expect another 25-basis points hike on July 27, on concerns over inflation hovering above 10%.
The RBI expects inlfation to come down to 5.5% by March-end 2011. While the government feels that the food inflation would come down, analysts said the overall inflation would increase in the coming days due to the steep hike in fuel prices.
The government had last month deregulated petrol prices, leading to a Rs 3.5 a litre hike, while diesel rates were raised by Rs 2 a litre, LPG by Rs 35 a cylinder and kerosene by Rs 3 a litre.
This is expected to add at least one percentage point to the inflation rate.