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Pressure on food prices coming down: Pranab

business Updated: Mar 15, 2010 21:28 IST
PTI
Finance Minister Pranab Mukherjee

Finance Minister Pranab Mukherjee on Monday said that pressure on food prices is easing, even as the overall wholesale price-based inflation is almost in double digits for February.

"I am afraid that we will have to deal with it (high inflation) for some more time. Inflationary pressure on food items have started coming down," the Finance Minister told reporters, to a query on inflation nearing double digits, on the sidelines of AIMA function in New Delhi.

Wholesale price-based inflation rose to 9.89 per cent in February from 8.56 per cent in the previous month due to increase in prices of certain food items such as sugar and the hike in excise duty on fuel announced last month.

Sugar prices rose by 55.47 per cent in February year-on-year, while potato turned costlier by 30 per cent and pulses by 35.58 per cent.

The food inflation was 17.81 per cent towards the end of February.

Chief Economic Adviser Kaushik Basu has also expressed hope that inflation will moderate in the next few months.

To tame inflation, RBI in its quarterly monetary review had asked banks to keep aside more cash with it. It hiked the cash reserve ration, which is the amount banks have to park with the apex bank, by 75 basis points to 5.75 per cent, which would suck out Rs 36,000 crore from the system.

The RBI's projection of inflation touching 8.5 per cent by this fiscal-end has already been breached last month.