Providing relief to common man as well as policymakers, inflation in India declined to over
three year low of 4.89 per cent in April on softening food prices, giving
RBI space to further ease interest rates .
Declining for the third straight month, inflation has returned to the comfort zone of the Reserve Bank for the first time since November 2009, when it was 4.78 per cent.
Encouraged by the declining trend, the Finance Ministry made a case for further rate cut by the Reserve Bank to boost sagging growth.
"I think we need to look at statement made by RBI Governor during the last policy review where he had stated that RBI is closely monitoring inflation figures and if there is dramatic change in inflation figures then RBI will take that in to consideration during its next review," Department of Economic Affairs Secretary Arvind Mayaram said here.
"So, we do believe that RBI would look at this figure (inflation coming below 5 per cent in April)," he said.
RBI is scheduled to announce mid-quarter review of monetary policy for 2013-14 on June 17.
Inflation fell to 41-month low of 4.89 per cent in April on account of decline in prices of food items, including fruits and vegetables. Based on the Wholesale Price Index (WPI), it stood at 5.96 per cent in March. In April, 2012, it was 7.50 per cent.
April recorded the lowest level of inflation since November, 2009 when it was 4.78 per cent.
In order to accelerate economic growth, RBI earlier this month cut key interest rates by 0.25 per cent.
Commenting on inflation numbers, Planning Commission Deputy Chairman Montek Singh Ahluwalia said: "The pressure on inflation is softening and I expect it in the next few months, we will continue to see that ... It (5 per cent) is acceptable level of inflation".
With PTI inputs
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