RBI to come out with a report on food inflation

Kolkata, May 11 (ANI): Reserve Bank of India (RBI) Deputy Governor Subir Gokarn said the bank would come out with a report on food inflation in a few weeks time.

Talking to reporters here, Gokarn said that the paper would study the impact of monsoon on the food price rise and whether the rise in excessive demand for sugar, milk and pulses indicated a shift in the nutritional choices of the people.

He also said a good monsoon should augur well for the food prices.

"I have no control over the monsoons, I have no idea as to how the monsoon process will play out. We are getting initial forecast of the monsoons being normal but ultimately the process, the path of the food prices in the short term over the next few months will depend significantly how good the monsoons are," he said.

"So, if we have a normal monsoon across the country we should see the food prices started to come down over the course of the next few months," he added.

According to the government data, India's annual food inflation hovered around 16.04 percent for the week ended April 24.

Inflation is spreading to non -food manufactured items, which may keep pressure on overall inflation. Last month, RBI tightened its monetary policy with a view to arresting food inflation from spreading to other sectors.

Last year, the government's forecast of a normal monsoon proved wrong and the country grappled instead with a baking drought caused by its driest monsoon in 37 years.

Good rainfall would help India's farm output rebound after last year's drought, which triggered a sustained rise in inflation that boosted food prices 17.7 percent in the 12 months to April 10, and fuel prices by 12.5 percent. (ANI)