It will be a crucial test for Prime Minister Narendra Modi to curb inflation and prise rise, as it was a prime agenda of Bharatiya Janta Party during general elections. Promises of good days, Acche Din, have been made by Modi led BJP.
Inflation to five-month high of 6.01% in May.Prices of essential food items like vegetables, fruits and cereals, have already pushed up.failed monsoon in 2009 had led to the worst drought in nearly four decades with food inflation up to more than 21%.
If prices are not controlled in time, the feeling of triumph in the BJP would not take much time to turn into one of despair.
Modi government is not lacking on commitment or pro-activeness on the inflation front with PM giving clear indications of, more than once, that curbing inflation would be top priority of NDA government.
Weather forecast from IMD has cut its June-September monsoon forecast to 93% – and the risk of global crude oil prices going out of hand over the political tension in Iraq may further worsen the price situation.
Arun Jaitley said the Centre is committed to ease supply side constraints while blaming inflation partly to withholding of food stocks by traders. Jaitley also urged states to take firm measures against hoarders to check speculation.
PM also blamed the previous government for the state of an economy that has suffered its longest slowdown since economic reforms in 1991.
Inflation also puts at risk, the government’s ambitious targets for the Indian economy. Modi and his team are working to bring about a turnaround but rise in inflation will ensure that Reserve Bank of India’s hands remain tied on the interest rate front.
RBI Governor Raghuram Rajan has made his priorities clear. The next few quarters would be engaged in combating inflation, he said today.
Time would demosntrate whether Modi would prescribe a dose of bitter medicine to his children to combat price rise.
