The recent decision of the central government to cut the excise duty on diesel and petrol is significantly positive for inflation, Reserve Bank of India Governor Shaktikanta Das said on Wednesday.
He said food inflation is now under control, but core inflation continues to remain elevated.
“That (excise duty cut on petrol and diesel) is significantly positive for inflation,” Das said. Inflation in India is mainly caused due to the supply-side factors, which have been addressed by the government, he added.
“The supply-side factors have been addressed by the government, particularly with reference to pulses and edible oils, and now very recently with reference to petrol and diesel. All these have augured well for the inflation scenario.
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“So, food inflation, by and large, looks to be now under control,” Das said.
“So far, as India is concerned, core inflation has remained elevated, and that is a policy challenge, and we are keeping a very close watch of the evolution of the core inflation,” he noted.
Even the fuel inflation has also remained elevated, and the RBI is closely monitoring it, he added.