Reserve Bank governor Shaktikanta Das on Friday said the central bank expects retail inflation to start declining from this month. He was referring to the central government’s steps to check prices of vegetables like tomatoes, restrictions on export of non-basmati rice and reduction in prices of household LPG cylinders.
Mr Das was addressing a programme organised by Devi Ahilya Vishwavidyalaya in Indore to interact with local students. Earlier, he also attended the central board meeting of the Reserve Bank.
“We expect (retail) inflation to start coming down from September. Although August’s (retail) inflation will be very high, we expect inflation to start coming down from September.
Tomato prices have already fallen and retail prices of other vegetables are also expected to come down from this month, he said.
Mr Das said the government has taken several steps to ensure affordable supply of tomatoes and other items of common need to the people.
“Restrictions have been imposed on the export of non-basmati rice. The prices of LPG cylinders used in homes have been cut recently.”
According to government data, retail inflation rose to a 15-month high of 7.44 per cent in July.
“In July, (retail) inflation was at a very high level. This surprised everyone. But mainly due to high prices of tomatoes and other vegetables, we were expecting it to remain high in July.”
He asserted that despite all the global challenges, India is among the fastest-growing major economies in the world.
Mr Das said that the position of Indian banks is strong and stable due to strong regulatory measures, “but the domestic financial world always needs to be vigilant”.
“You must have seen the failure of some banks in the US recently and big banks like Credit Suisse in Switzerland. But this global turmoil had no impact on India,” he said.
Mr Das also said that due to the promotion of digital payments, the number of transactions through UPI in the country crossed 10 billion in August.
The RBI Governor said efforts are being made to promote payments through feature phones in the country so that even those people in remote areas who do not have smartphones and where there is a problem with mobile networks can take advantage of this facility.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)