New Delhi, August 7: Hours after reducing the repo rate - the rate at which the central bank lends to their commercial counterparts - by 35 basis points and scaling it to 5.40 per cent, Reserve bank of India informed on Wednesday that food inflation accelerated to 2.4 percent in June 2019 from 2 percent in May. The apex monitoring body even stated that food items would continue to get costlier due to uneven rainfall.

Releasing the Monetary and Credit Policy statement on Wednesday, RBI said, "Uneven spatial and temporal distribution of monsoon could exert some upward pressure on food items." Adding more, the RBI projected that Consumer Price Index (CPI) inflations at 3.10 per cent for Quater 2 of Fiscal Year 20 (Q2FY20) and 3.5-3.7 per cent for the second half of FY20. However, RBI's Monetary Policy Committee (MPC) maintained that inflation is currently to remain within the target over a 12-month ahead horizon. Indian Economic Slowdown Hits Auto Sector, Over 3.5 Lakh Employees Laid Off Since April 2019

It said, "Retail inflation, measured by y-o-y (year-over-year) change in the CPI, edged up to 3.2 per cent in June from 3.0 per cent in April-May. Food inflation rose to 2.4 per cent in June from 2.0 per cent in May and 1.4 per cent in April, while inflation in the fuel and light group moderated. Excluding food and fuel, inflation remained unchanged after having fallen by 50 basis points to 4.1 per cent in May from 4.6 per cent in April. The softness in inflation in this category was broad-based. Inflation expectations of households moderated by 20 basis points for the one year ahead horizon."

Adding more, RBi Governor Shaktikanta Das, opined, "In view of these developments and considering that inflation for the first quarter of 2019-20 was in alignment with its June projections, the MPC has retained its inflation projection at 3.1 per cent for Q2:2019-20 and revised the projection for H2:2019-20 to 3.5-3.7 per cent, with risks evenly balanced, from 3.4-3.7 per cent projected in June. CPI inflation for Q1:2020-21 has been projected at 3.6 per cent."

On rising inflation, the MPC observed, "Since the last policy, domestic economic activity continues to be weak, with the global slowdown and escalating trade tensions posing downside risks. Private consumption, the mainstay of aggregate demand, and investment activity remain sluggish. Even as past rate cuts are being gradually transmitted to the real economy, the benign inflation outlook provides headroom for policy action to close the negative output gap. Addressing growth concerns by boosting aggregate demand, especially private investment, assumes the highest priority at this juncture while remaining consistent with the inflation mandate." Economic Crisis of India: SEBI Data Says Investors Lost Rs 13 Lakh Crore in 1 Month Post Union Budget 2019

Now looking at the rising prices of the commercial commodity, recent steps were taken by the RBI's MPC has been applauded by commerce body FICCI. But with economic slowdown looming large and massive job cuts in various sectors knocking the door, serious revival measures need to be taken by the Union government too.

(The above story first appeared on LatestLY on Aug 07, 2019 05:33 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).