RBI should definitely cut interest rates, policy to consider food inflation flawed: Piyush Goyal

Union minister Piyush Goyal on Thursday said the Reserve Bank of India should definitely cut the interest rates despite the rising food inflation, calling it a "flawed theory."

Speaking at the CNBC-TV18 Global Leadership Summit, the Union minister of commerce and industry said, "RBI must cut interest rates. It’s a flawed theory to consider food inflation for making a choice on cutting rates.”

Goyal, however, clarified that it was his personal view and not that of the government.

He also exuded confidence in the inflation coming down in December.

Asked if the government was looking at some measures amid rising inflation, Goyal said the RBI has been actively intervening to ensure India remains one of the best-performing economies in the world in terms of inflation management.

"The average inflation in the last 10 years has been the lowest India has seen since independence," the minister said.

He added that the monetary policy committee had predicted the spike in inflation in October.

"It was not any surprise. But at the same time, we all recognise that falling again by December or January."

According to data from the Ministry of Statistics and Programme Implementation, India’s retail inflation accelerated to 6.21% in October, up from 5.49% in September. The All-India Consumer Price Index (CPI) showed rural inflation at 6.68% and urban inflation at 5.62%.

The ministry attributed much of the inflationary trend to food prices. The Consumer Food Price Index (CFPI), which tracks food price inflation, rose to 10.87% in October, with rural and urban food inflation at 10.69% and 11.09%, respectively. While prices of pulses, eggs, sugar, and confectionery saw a decline, the inflation rate for vegetables, fruits, and oils and fats increased sharply, adding pressure on household budgets across the country.