Finance minister Arun Jaitley, who blamed the inflationary prices on the poor monsoon and hoarding, came in the line of criticism from the Opposition as the Narendra Modi-led government struggles to contain rising prices of food and fuel in the country, which has led to a five-month high inflation.
The pressure on Modi comes a little after he had warned of a "bitter medicine" in the upcoming budget to revive the Indian economy. The month of May had seen an increase in the wholesale price index (WPI) inflation to 6.1 percent, while food inflation went up to 9.5 percent from 8.64 percent in the previous month, as reported by Mint. India uses the WPI, which shows the price of goods before it reaches the retail stage, as the central measure of inflation.
"The increase is primarily on account of higher inflation in food articles, fuel and power costs," Jaitley posted on his official Facebook page. The minister stressed that "speculative hoarding" and a "weak monsoon" were responsible for the rising prices.
"The rise in prices of food articles can also be attributed to withholding of stocks on account of apprehension of a weak monsoon. The State Government should take effective steps to ensure that speculative hoarding is discouraged," he added.
However, Jaitley was reproached by the Congress for his statement.
"They (BJP) came into power with a promise that they will reduce inflation. We knew that the biggest reason behind inflation is that people store goods and do their black marketing. Jaitley is speaking the same language today but now the country needs results," Congress spokesperson Rashid Alvi said, as quoted by ANI.
"The government should explain why inflation has gone up in one month since they have come into power, just blaming will not help," Congress member PC Chaco was quoted as saying.
The Modi government is drawing flak particularly because of its pre-poll promises to lower prices for citizens.
Reserve Bank of India Governor Raghuram Rajan on Tuesday said that they were monitoring inflation and that food management was necessary to manage food prices.
The Iraq crisis, wherein the Sunni militant group Islamic State of Iraq and Levant (ISIL) have run over the Shia towns of Iraq, has affected crude oil prices and have weakened the Indian Rupee, which fell to a six-week low of 60.50 against the dollar. Iraq remains India's second largest oil supplier.
Jaitley is expected to announce the BJP government's first budget some time in the second week of July.
