Inflation under control despite poor monsoon: Mid-year review

NEW DELHI: The government on Tuesdaysaid comfortable foodgrain stocks, more than two and half times the requiredminimum buffer stock, has helped keep the general price level withincontrol.
"The inflation rate has been restricted to just three per cent,with foodgrains, which constitute the wage goods for the poor, registeringlittle or no price increase," the Mid-Year Economic Review, presented in theParliament, stated.
The review presented by the Union Finance MinisterJaswant Singh said that harsh drought, in 14 states was likely to dampen thisyear''s economic growth expectations. However, the negative sentiments witnessedtowards the end of August, subsequent to poor monsoon, has since waned,pricipally on account of several positive developments in the economy.
Themost important is the success in containing prices, which, in past, generallytended to rise rapidly after monsoon failures, it said.
Robust economicgrowth, healthy accumulation of foreign exchange reserves, a much improvedperformance by infrastructure industries and a revival in overall industrialgrowth are clear indicators of the buoyancy and resilience that the economy hasexhibited in the current year despite several and simultaneous adverse factors,the review added.