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The short-term inflation outlook for India is benign, and the expectation of a normal monsoon and moderating global prices of key imported items give credence to the projections made by the RBI and IMF, the Economic Survey said on Monday.
However, to ensure long-term policy stability, the Survey 2023-24 suggested making focused efforts to increase the production of major oilseeds, expanding the area under pulses, and assess the progress in developing modern storage facilities for specific crops.
The Economic Survey 2023-24, tabled in Parliament by Finance Minister Nirmala Sitharaman, also suggested linking of price monitoring data for essential food items collected by different departments to help monitor and quantify the build-up of prices at each stage from the farm gate to the final consumer.
"The ongoing efforts to construct the producer price index for goods and services may be expedited to have a greater grasp of episodes of cost-push inflation," said the Survey authored by a team of economists led by Chief Economic Adviser V Anantha Nageswaran.
It also prescribed expeditiously revising the consumer price index with fresh weights and item baskets.
In 2023, India's inflation rate was within its target range of 2 to 6 per cent.
Compared to advanced economies like the USA, Germany, and France, India had one of the lowest deviations from its inflation target in the triennial average inflation from 2021-2023, the Survey said.
India successfully managed to keep retail inflation at 5.4 per cent in FY24, the lowest level since the Covid-19 pandemic period.
Retail inflation in June rose to four months high of 5.1 per cent. Also, wholesale inflation stood at 3.36 per cent in the month on account of rise in prices of food articles, especially vegetables and manufactured items.