Govt mindful of inflation situation, says RBI Governor Das

With the RBI’s increased consumer price inflation estimate, Shaktikanta Das says it is in the Centre’s hands to decide what supply-side measures to take to tackle the price rise.

Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday said the government is "mindful" of the current inflation situation, and it is up to the Centre to take further supply-side measures to contain the price rise situation.

"I am sure the government is mindful of the current inflation situation and it is for the government to decide on further supply-side measures which they consider as necessary," Mr. Das said addressing the customary post-policy press conference at the central bank headquarters.

The remarks came after the RBI sharply increased its FY23 average consumer price inflation estimate to 6.7 per cent from the earlier 5.7 per cent, and attributed a bulk of the increase to be coming from the supply side troubles, with food inflation alone accounting for three-fourths of the increase in the estimate.

The government had last month cut excise duties on fuels by ₹9.5 per litre, reducing the pressure on the common man and input costs. It has also taken other measures like banning or containing exports of food products like wheat and sugar.

Mr. Das said it is not for him to speculate or comment on what the exact measures can be.

"It is for the government to decide and I am sure they will decide. If and when there is a requirement, they will take the steps," he said.

It can be noted that in a televised statement before the press conference on Wednesday, Mr. Das also pitched for a reduction in value-added tax (VAT) levied by the state governments, saying there has been a significant moderation in urban households' inflation expectations after the Centre's excise duty cuts.