During an interaction with the industry & tax officials in Kolkata this Friday, Nirmala Sitharaman stated that there had been no rise in inflation since 2014. She further said that it is under complete control. Sitharaman commented, “Inflation is absolutely under control. Nobody can question our government on inflation. Inflation has not risen since 2014. It was up during 2009-14 (during the UPA-II). The price rise was in two digits for commodities during that period.”
The nation’s rate of inflation eased slightly in the month of July, staying under the central bank’s 4% medium-term target for the 12th month, backing views that there will be a policy rate cut in October.
The annual retail inflation dropped to 3.15% in the month of July from an eight-month high mark of 3.18% in June. As a result of the country’s current slowdown, demand for RBI to further cut rates to push growth, scale-up consumption and demand have been put forward. The low inflation serves as a critical pre-requisite for the Reserve Bank of India to cut the interest rates further.
Inflation has dropped sharply since November 2013’s peak of 12.17% because of a fall in the price of oil and food. According to two analysts who successfully estimated the inflation figures, core consumer inflation, which strips out food and fuel prices, was estimated between 4.47% and 4.6% in July, above 4.09% to 4.11% in June.
While the low inflation has been assisting the economy, descending income of farmers and low steeping employment has hit consumer demand & economic growth. The state is concerned about the downfall of private investment & manufacturing decline, specifically the automobile sector, which has pulled down the annual economic growth to a five year low of 5.8% in January-March.