Piyush Goyal does not agree with RBI's stance on food inflation!
Union Commerce minister piyush goyal has asked the reserve bank of india to consider cutting interest rates. The Union minister also raised questions on the Central Bank's policy regarding RBI's excessive dependence on food inflation for monetary policy decisions. He has termed the decision taken regarding the base rate keeping in mind the unstable food inflation as a useless principle. However, he clarified that this is his personal opinion and it is not the official stand of the government.
piyush goyal was addressing the CNBC-TV18 Global Leadership Summit. He expressed confidence that inflation will come down by December. He said that inflation during the tenure of the Modi government has been the lowest since independence. piyush goyal raised questions on RBI's dependence on food inflation in monetary policy decisions at the summit, but let us tell you that the stance of reserve bank of india governor Shaktikanta Das is somewhat different.
In august 2024, the RBI governor said in an interview that if we say that inflation has reduced by removing the prices of vegetables and food items from the Consumer Price Index, then it will not be right from the point of view of the public. He said, we need to think according to the public who have to spend 50 percent of their income on food items. He said, this question will come in the mind of the public that our salary is so much and we have to spend so much on food items, then how is the government and RBI saying that inflation is coming down? The RBI governor said, food items are a very important component in our headline inflation target. Food inflation accounts for 46 percent of our consumption basket.
The Commerce minister expressed concern over the selling of foreign investors in the indian stock market. He asked investors to adopt a long-term investment perspective instead of the fluctuations that happen every quarter. Despite short-term challenges, he said that India's economic fundamentals remain strong.