Economic Survey: ‘Avg inflation during 2017-18 lowest in six years’
New Delhi , Jan 29 : The Economic Survey 2017-18 noted that the inflation numbers presented during 2017-18 averaged at a six-year low of 3.3 per cent in 2017-18.
The decline in the inflation, the survey noted, was due to major commodity groups except, housing and fuel & light.
The headline inflation has been below 4 per cent for 12 straight months, from November, 2016 to October, 2017 and CPI food inflation averaged around one per cent during April-December in the current financial year, the Survey said.
The survey further observed that the economy witnessed a gradual transition from a period of high and variable inflation to more stable prices in the last four years. Headline inflation measured by the CPI remained under control for the fourth successive year.
The decline in the inflation in the first half of the current fiscal year was indicative of a benign food inflation which ranged between (-) 2.1 to 1.5 per cent, the survey said. This was made possible due to good agricultural production coupled with regular price monitoring by the Union government.
However, the rise in food inflation in recent months is on account of factors driving prices of vegetables and fruits. In rural areas, while food was the main driver of CPI inflation during 2016-17, in urban areas housing sector has contributed the most to inflation in the current financial year.
“If we a look at state-wise inflation during 2017-18, many states have witnessed sharp fall in CPI inflation. Inflation in 17 states was below 4 per cent, during the period. This has been possible due to various efforts made to contain inflation at various levels by the Government,” the Survey noted.
Meanwhile, Finance Minister Arun Jaitley while tabling the document in Lok Sabha today said controlling inflation has been a priority for the Centre.
Jaitley stated that advisories are being issued, as and when required, to state governments to take strict action against hoarding and black marketing and effectively enforce the Essential Commodities Act, 1955 and the Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities Act, 1980 for commodities in short supply.
Further, regular review meetings on price and availability situation are being held at the highest level including at the level of Committee of Secretaries, Inter Ministerial Committee, Price Stabilisation Fund Management Committee and other Departmental level review meetings.
The government also announced higher minimum support price (MSP) to incentivise production and thereby enhance availability of food items which may help moderate prices. Also, a scheme titled Price Stabilization Fund(PSF) is being implemented to control price volatility of agricultural commodities like pulses, onions, and so on.
Jaitley further claimed the Government approved enhancement in buffer stock of pulses from 1.5 lakh to 20 Lakh metric tonnes (MT) to enable effective market intervention for moderation of retail prices. Accordingly, a dynamic buffer stock of pulses of upto 20 lakh tones has been built.
Furthermore, the Government has imposed stock holding limits on stockiest/dealers of sugar till April, 2018, along with 20 percent duty on export of sugar for promoting availability and moderating price rise. Also, permitted import of 5 lakh tones of raw sugar at zero duty; subsequently, import of additional 3 lakh tones was allowed at 25 percent duty.
In a bid to tackle surging onion prices, states and union territories were advised to impose stock limit on onions. States were requested to indicate their requirement of onions so that import of requisite quantity may be undertaken to improve availability and help moderate the prices.