The finance ministry on Tuesday said price pressure on food items is expected to be transitory, with tomato prices seeing a decline, but the government and RBI need to step up vigil to deal with elevated inflationary pressure.
Enhanced provision for capital expenditure by the government in the current fiscal is now leading to crowding in of private investment, and domestic consumption and investment demand would continue to drive growth going forward, said the ministry's Monthly Economic Review for July.
The consumer price index based retail inflation spiked to a 15-month high of 7.44 per cent in July 2023, with specific food commodities mainly driving the increase. Core inflation, however, stayed at a 39-month low of 4.9 per cent.