Much of the rise in prices has been in food items, he said, adding that there is a need to develop the commodity futures market with an aim to provide price stability and enable the government deal with inflation more "effectively".
Asked if the falling trend in inflation is positive for the economy, Mayaram said: "Of course, this is the trend for a while now, and this (inflation) will continues to go south."
Retail inflation touched a three-month low of 8.28 per cent in May from 8.59 per cent in April due to subdued prices of vegetables, cereals and dairy products.
Highlighting the key role that commodity futures market could play in controlling inflation, Mayaram said: "The country has gone through the phase of an almost entrenched inflation for over 2-3 years. And much of it is driven by food prices. So it is important that we develop this market."
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Besides, there is a need to boost the food processing industry despite the country being the world's largest producer of vegetables and fruits, he said.
There is also a need to develop long-term export market in the agriculture sector, he added.
Emphasising on the requirement to develop depth in commodities market for better price discovery and checking price manipulation, Mayaram said the government is determined to address all issues, including commodity transaction tax, strengthening sector regulator FMC, among others.
On concerns over falling volumes in commodity exchanges due to commodity transaction tax, Mayaram said the market participants should focus more on addressing other weaknesses of the market than just on the tax issue.
Talking about the pending amendment bill to the Forward Contract Regulation Act, he said, "The new law must come in place. We are working towards that. We are hopeful that very soon we should have a new statute in place which will provide greater regulatory authority to FMC."