Economy moves to low level of inflation in last five fiscals, says Economic Survey

NEW DELHI: The country's inflation rate has moved to a more stable and low level in the last five fiscals, and controlling price surge remains a key policy focus area of the government, the Economic Survey for 2018-19 said Thursday.

Retail inflation based on consumer price index - Combined (CPI-C) fell to 3.4 per cent in 2018-19 from 3.6 per cent in 2017-18, 4.5 per cent in 2016-17, 4.9 per cent 2015-16 and 5.9 per cent in 2014-15, the Economic Survey 2018-19, tabled by Finance and Corporate Affairs Minister Nirmala Sitharaman in Parliament, said.

Retail inflation during the first month of the current fiscal stood at 2.9 per cent, down from 4.6 per cent a year ago.

Food inflation based on Consumer Food Price Index (CFPI) declined to a low of 0.1 per cent during the financial year 2018-19, the survey said.

"The Economic Survey states that the economy witnessed a gradual transition from a period of high and variable inflation to more stable and low level of inflation in the last five years.

"The government has taken a number of measures to control inflation especially food inflation," as per the survey.

Controlling inflation remains a key area of policy focus and the general measures such as regular monitoring of inflation, issuing advisories to states against hoarding and black marketing, holding regular review meetings on prices and availability of key commodities were taken to keep inflation in check, the survey said.

Higher Minimum Support Prices (MSPs) for pulses and other crops to incentivise production and setting up of Price Stabilisation Fund (PSF) for procurement of agri-horticultural commodities are among the other steps taken.

Specific measures such as releasing onions at reasonable prices, utilisation of pulses from buffer for strategic market interventions and to meet the requirements of the Army and Central Para-Military Forces were among the specific measures taken by the government, according to the survey.

The survey also finds that food inflation in the country has been extremely benign.

"Average food inflation for the financial year 2018-19 declined to a low of 0.1 per cent. The food deflation in the second half of 2018-19 is mainly due to deflation in vegetables, fruits, pulses and products, sugar and confectionary and eggs, which together account for 13.1 per cent rate in overall CPI-C," the survey said.

The year also witnessed a reduction in both rural and urban inflation, while many states witnessed a fall in retail inflation.