RBI may not meet inflation target

Mumbai: India’s target of 4 per cent CPI inflation in the near term seems unlikely according to Dun & Bradstreet India due to the buildup of inflationary expectations from the 7th Pay Commission and the rearing up of the inflation.

Lead economist Dr Arun Singh said this along with uncertainty over pickup in rural demand “would continue to keep inflationary expectations on the upside.”

Food inflation will be an important component in the decision making of the monetary policy committee and the new RBI governor Urjit Patel.

Vijay Jawandhia, a farmers leader from Wardha (Vidarha, Maharahstra) says there is no reason for food prices to go and cites the example of the two most popular pulses tur dal and moong.  

Though tur dal has yet to come into the market, prices are already down to Rs 80 per kg from Rs 150-200 per kg in retail and Rs 70 in wholesale.

Moong is also down to Rs 4,000 per kg, says  Mr Jawandhia explaining since there has been a 50 per cent increase in the acreage under pulses, the prices of pulses are already falling.