Vegetable prices likely to cool down next month, says Finance Ministry

Govt expects veg prices to cool off; crude oil prices a concern; no excise duty cut; capital expenditure to reach 50% by Sept; govt taking steps to control inflation; flexible trade policy adopted to keep prices down; interventions to cool tomato prices; retail inflation at 7.44% in July.

The government expects vegetable prices to start cooling off from next month with the advent of new crops in the market, but rising crude oil prices is a concern even though it is still within the tolerable zone of $90 a barrel, a Finance Ministry official said.

The official further said that reduction in excise duty is not on cards and the government is driving infrastructure investment, and private sector capital investment is yet to gather steam.

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He further said that the Centre's capital expenditure which was 28% of Budget estimates at the end of June quarter, will reach 50% by September end. In the 2023-24 budget, the government had hiked capital investment outlay by 33% to ₹10 lakh crore in the current fiscal.

The official further said that a 6% rainfall deficit is unlikely to impact kharif sowing as the agriculture sector is resilient. The government has been taking steps to control inflation, including releasing wheat and rice stocks from reserves, putting restrictions on exports of rice, sugar, and allowing import of pulses and oilseeds.

"Flexible trade policy has been adopted to keep prices down. We must remember that global food prices are very high due to the Ukraine war and the supply of food grains has been affected and that is a global factor from which Indian cannot remain isolated. We have taken measures to isolate our population from that inflation and relative to others we are in a much better position," the official told PTI.

He said interventions have been made to cool tomato prices and those steps will bear fruit in the coming months. Tomato is a seasonal crop and we will get another crop shortly and the price pressure will ease.