Mumbai, July 27: A better monsoon than last year augurs well for the farm production, which might act as a major dampener for food inflation, RBI said today.
“The cumulative rainfall has been 14 per cent below its long period average (LPA) during the current monsoon season so far (as on July 21, 2010). Even so, monsoon performance has been much better than it was last year, which augurs well for agricultural production,” the RBI said in its monetary review.
Data on crop-wise area indicate a significant increase over the relatively low levels of last year, the country’s apex bank said.
“A good kharif harvest will act as a major dampener on short-term food price inflation,” RBI Governor D Subbarao said.
Food inflation is 12.47 per cent for the week ended July 10.
–Agencies