Reserve Bank of India Governor Shaktikanta Das on Wednesday said the central government’s recent move to reduce excise duty on fuel and petrol is very positive for inflation.
They claim that food inflation is now under control, but that core inflation remains high. “The reduction in excise duty on gasoline and diesel has had a significant impact on inflation,” Das remarked. He said that inflation in India is mainly due to supply side factors, which is handled by the government.
The government has addressed supply-side problems, primarily with respect to pulses and edible oils, and more recently with respect to gasoline and diesel. All this points to a favorable inflationary future.” Das said, food inflation appears to be under control for the most part. So far, core inflation in India has remained high, which is a policy issue, and We have a very careful watch on the trajectory of core inflation, he said. Fuel inflation has also been high and the RBI is keeping a close watch on it, he said.