Citibank predicts that a cut in cooking gas prices in India could help ease inflation, shift focus to reducing petrol and diesel prices, and positively impact consumer sentiment.
They expect a dip in inflation by around 30 basis points and suggest more fiscal measures to tackle inflation and boost rural economies.
Citibank economists suggest that a reduction in cooking gas prices could alleviate inflation by about 30 basis points.
Inflation is expected to decrease to below six percent in September due to the cooking gas price cut and a decline in tomato prices.
Cooking gas cylinder prices in India were recently reduced by $2.4, benefiting around 300 million customers.
High food costs drove retail prices to a 15-month high in July; Citibank recommends fiscal measures to reduce inflation.
Stable but high petrol and diesel prices could be addressed with excise tax cuts.
The Reserve Bank of India faces challenges in controlling inflation while balancing growth; interest rates were left unchanged.
Concerns about supply shortages due to adverse weather impacting crop output led to an 11.51% increase in food prices.