Govt doing its best to keep food inflation down

Chief Economic Advisor Raghuram Rajan on Friday said efforts were being made to create more room for the consumer price index CPI-based inflation, especially food prices, to come down. This will in turn give the RBI further room to cut interest rates and boost the economic growth, he said immediately after the central bank’s decision on Friday to reduce the repo rate by 25 basis points to 7.25%.

Rajan said though there is less room for the country’s headline inflation (based on the Wholesale Price Index) to reduce further from the three-year low of 5.96% in March, the CPI-based inflation ? which remains high at 10.39% ? could soon come down.

Department of Economic Affairs secretary Arvind Mayaram said,”There are certain steps being considered by the government that will perhaps bring the food prices down quite to a tolerable limit.? The government is hopeful of a bumper Rabi?crop leading to cooling of food prices.

Echoing?Mayaram’s views on growth, Rajan?said the government on its part is doing all it can to take the GDP growth rate to 6.1-6.7% this fiscal.