Food inflation returning to double digits is not in itself a cause for alarm, although overall inflation remains a concern in the medium term, government's Chief Economic Adviser Kaushik Basu said today.
"Inflation situation in the medium-term remains something of a concern but today it is not something which shows that the situation has got worse," Basu told reporters after the Reserve Bank of India's Board meeting held here.
After a fortnight of being in single digit, food inflation for the week ended July 31 shot up to 11.40 per cent from 9.53 per cent the week earlier on the back of a spike in prices of cereals, milk and fruits.
"I just want to clarify this was entirely predictable. It has nothing to do with the Food Price Index (FPI) which has actually fallen slightly. Exactly one year ago, there was a sharp drop in FPI," Basu said.
He, however, declined to comment on the decline in industrial growth to 7.1 per cent from 8.3 per cent.
