Food inflation to decline in coming months: Mukherjee

Finance Minister Pranab Mukherjee has said that despite the country being worried about high inflation, there are indications of a cooling off in high food prices that have been driving it.

"What is the most worrisome feature of the economy is the inflation, which agitates the entire house and the people outside the house. I share the concern of honourable members," said Mukherjee, while speaking in the Lok Sabha on Wednesday.

Mukherjee mentioned that the inflation would ease in the next few months on indications of a good monsoon.

"Indications of softening of the food inflation are clearly visible. There has been a significant decline from the peak food inflation of over 20 percent recorded in December 2009 to 17.7 percent in March 2010," said Mukherjee.

"The inflation in essential commodities also declined from the peak 23.8 percent in January 2010 to 19.8 percent in March 2010, it is expected that the decline would continue in the recent (sic) months uninterruptedly," he added.

Mukherjee further said the recent moves by the country''s central bank - the Reserve Bank of India (RBI) to tighten monetary policy should anchor inflationary expectations, adding that the buoyed by predictions of normal monsoon and better economic conditions, the economy is expected to reach 9 percent mark by 2011-2012.

"Going by these indications and considerations that agriculture has a set back in 2009-2010. Indian economy is expected to go around 8.5 percent during 2010-2011 and to reach 9 percent mark in 2011-2012," said Mukherjee.

Annual wholesale price inflation in March touched a 17-month high of 9.90 percent, prompting the RBI to raise rates in April, its second such move in as many months.