Reserve Bank of India Governor Duvvuri Subbarao reiterated his concern about inflation on Monday, saying it remained above the central bank’s comfort level, and called monetary policy the first line of defence even when inflation was coming from supply shocks.
Subbarao said wholesale price inflation was high, referring to the most recent June data, out last month, which showed a 7.3 percent rise from a year ago. India is set to report July data on Tuesday.
Subbarao added the fiscal deficit was also pushing up inflation and said there were lots of inflationary pressures on the economy, adding demand pressures — and not just supply factors — were also adding to inflation.