Prime Minister?s Economic Advisory Council (PMEAC) chairman C Rangarajan is optimistic on food inflation declining to 7% by end of March. ?The easing of food price inflation may not be fully reflected in the March inflation data, but the continued softening of items like vegetables would definitely bring down the overall food inflation,? he said while talking to media at the Madras School of Economics. The food price inflation touching almost 16 % in January and dropping close to 11.5% in February was majorly due to spike in vegetable prices including Onion. With fresh arrival of vegetables post monsoon harvest in the market, the weight of vegetable prices on the overall food price basket would drastically come down, he added.
He also said wheat from the central storage pool could be released under Open Market Sales Scheme (OMSS) by FCI to state public distribution systems that in turn can dispense OMSS wheat to the public in times of upward movement of prices.
On the fuel price inflation and rising crude, he said at some point of time, the burden of oil price escalation has to be shared with the consumers. The fuel price inflation hovered around 12% to 12.6% during February.
?It is inevitable that crude continues to trade high in
the wake of crisis in West Asia. Crude crossing $100 a barrel mark would tend to impact our import bill. The government may be forced to hike petrol prices to minimise the fuel price subsidy burden if the crisis remains unabated,? he said. On MAT the PMEAC Chairman said,?The idea of MAT is universal in application when companies show their book profits?.