A day after the WPI-based inflation slipped to a five-year low of 2.38 per cent in September, former finance minister P Chidambaram suggested that the government should persuade Reserve Bank of India to cut the interest rates.
“If the government believes that the decline in the rates of inflation will prove to be a secular decline, it should persuade the RBI to cut the policy rates,” said Chidambaram while crediting the drop in inflation to global softening in commodity prices and steps adopted by the previous government.
The retail inflation, for the month, too, had fallen to 6.46 per cent, inching closer to RBI’s target of 6 per cent by March 2015. Dismissing the claims of the government that inflation came down on account of the measures adopted by them, the former minister asked what “new measures” had been taken by the Centre to contain inflation.
“Unloading stocks of wheat and rice in the open market, nudging states to amend the APMC Act, asking states to take action against hoarders and imposing MEP on the export of certain agricultural products are a continuation of the UPA government’s measures,” he said.