No easy answers to high retail inflation: Chidambaram
Mumbai: As retail inflation crossed the double-digit mark, Finance Minister P Chidambaram today said the government is looking at various suggestions to cool prices but there were no easy answers to the problem.
"Both RBI and the government are trying number of measures to cool inflation… We are looking at various suggestion that we have got. I am open to suggestion but I am afraid that there is no easy answers to cool retail inflation," he said while addressing investors here.
The CPI inflation, measured by movement in the retail prices of food items, soared to a seven-month high of 10.09 per cent in October. The wholesale price-based inflation too shot up to 8-month high of 7 per cent in the same month.
He attributed the rising inflation to the high fiscal deficit incurred by the government to neutralise the impact of global financial meltdown of 2008.
The Minister further said although the government had offloaded 5 lakh tones of wheat to contain price rise, it would not cool prices of fruit, vegetable, milk and eggs.
Chidambaram said his foremost priority would be to contain fiscal deficit and Current Account Deficit (CAD).
The fiscal deficit in the current financial year, he added, would be brought down to 4.8 per cent of the GDP, from 4.9 per cent in 2012-13.
As regards the CAD, the Minister said he would endeavour to bring it down to below USD 56 billion, a figure which was given by RBI Governor Raghuram Rajan yesterday.
CAD soared to a record high of USD 88.2 billion or 4.8 per cent of the GDP in 2012-13.