New Delhi, Jul 16 (ANI): India's food inflation would substantially ease out in next two weeks, claimed Kaushik Basu, Chief Economic Adviser to the Union Ministry of Finance.
He said this while addressing media persons at New Delhi on Friday.
The government, facing political protest against soaring prices, has been pinning its hopes on good summer rains to cool down food prices, which will help ease the double-digit headline inflation.
"It is reasonable to predict that the food price inflation that will be announced two weeks from now, that is, on Thursday, 29 July, will be substantially lower than what the inflation is now," said Kaushik Basu.
India's food inflation edged up to 12.81 percent in the year to July 3 from 12.63 percent in the previous week, snapping a two-week easing trend, on higher rice and wheat prices, data showed on Thursday (July 15).
"An analysis of data reveals that the overall food price index rose rapidly last year from June to November 2009. It peaked in the week ending November 27 when it reached 296. So the food price index in the November end in 2009 was 296. The latest weekly data stands at 296. The index now stands at 296. This means that, on an average, food price inflation has been zero since the end of November 2009," added Basu.
Earlier in the day, Agriculture Minister Sharad Pawar said weak monsoon rains in the past week will not significantly hurt crop output in the country and the weather outlook was encouraging.
However, the weather office on Thursday said monsoon rains were 24 percent below normal in the past week and unlikely to rebound in the week ahead, raising fears of crop loss.
India's headline inflation quickened to 10.55 percent in June, holding in double digits for the fifth straight month and cementing expectations the central bank will raise interest rates for a second time this month to contain surging prices.
The Reserve Bank of India, which surprised markets earlier this month by lifting policy rates by a quarter point in its third hike so far this year, is expected to raise rates by another 25 basis points at a policy review on July 27. (ANI)