Rising food inflation disturbing; Govt to take steps: Pranab Mukherjee

Terming the trend of rising prices of food items as 'disturbing', Finance Minister Pranab Mukherjee on Monday said the government will take steps to clear the supply-side bottlenecks to ease the price situation.

"Food inflation in the month of March has increased which is a disturbing factor," he said while commenting on the overall inflation data for the last month.

Inflation declined marginally to 6.89% in March, from 6.95% a month ago. It was 9.68% in March last year.

Pointing out that the government would have been more comfortable had the inflation been closer to 6.5%, he said, "we shall have to be alert on it. Ofcourse the supply side constraint substantially effect food inflation. We will be addressing that."

Inflation in food items rose sharply to 9.94% in March, as against 6.07% in February. Food articles have 14.3% share in the WPI basket.

Mukherjee said, however, he hoped that in course of time inflation will moderate.

During the month, vegetables inflation was as high as 30.57%, as against 1.57% in February.

Also, milk became expensive by 15.29%, while rice and cereals turned costlier by 4.73% and 4.41% respectively.

Potatoes too became costlier by 11.60%, and the price of pulses was up 10.05% in March.

Prices of eggs, meat and fish prices rose 17.71%. The rate of price rise was lower than 20% in February.

Meanwhile, there is widespread expectation that RBI may lower lending rate by 0.25% at its annual credit policy announcement tomorrow, although the inflation rate is still higher than the central bank's comfort level of 5-6%.