New Delhi: Decline in global prices of commodities has helped in checking rise in domestic prices even as the government took several steps to provide relief to consumers from high food inflation, Parliament was informed on Friday.
Prices of crude oil, petrol and cotton yarn have declined both in India and international markets during July 2014 to February 2015, Minister of State for Finance Jayant Sinha said in a written reply to the Lok Sabha.
"Broadly, the reduction in global prices had moderating impact on domestic prices. The divergence in the domestic and international prices stem from the extent of openness of international trade and depreciation of rupee," Sinha said.
Prices of iron-ore, steel and foodgrains have declined in the international market but increased or remained stagnant in India, he added.
Various restrictions in food and trade policy imposed to protect either farmers or consumers, particularly tariff barriers, affect the transmission of lower international prices to domestic prices, he said.
Sinha said government has taken various steps including higher allocation of rice to BPL and APL families, higher allocation of wheat under Open Market Sales Scheme, moderation in increases in minimum support prices besides advisory to states to allow free movement of fruits and vegetable by delisting them from APMC Act.
Besides, government has also signed an agreement with the Reserve Bank on flexible inflation targeting framework.
