The centre may soon unveil some measures with an eye on easing the impact of inflation on Indian consumers. While the government believes that the recent surge in inflation is linked to seasonal variations and temporary disruptions in supply, the upcoming state assembly, and next year’s general election, may necessitate a response to cool prices.
"There isn't a definite relief package in the works, but we could introduce certain ad-hoc measures," said a senior finance ministry official.
India's benchmark inflation as measured by the consumer price index jumped to 7.4 per cent in July, and the fear is that food prices are unlikely to ease anytime soon. While concerns about rising food prices persist, the government plans to observe the situation over the next couple of before deciding on specific measures.
Among the measures aimed at protecting the most vulnerable people in society is a possible extension of free food grains under the National Food Security Act (NFSA). In addition, the existing subsidy support for cooking gas under the Ujjwala scheme will continue.
The government may also reduce import duty on imported wheat. "We might think about reducing the duty on wheat imports, although wheat isn't our primary concern at the moment. The 7.4 per cent inflation was mainly driven by vegetable prices," said the official.
The government remains cautious and will decide on further actions if high inflation persists beyond September, the official added.