Finance Minister Pranab Mukherjee on Tuesday said the hike in fuel prices has added to inflationary pressures, but the arrival of new crop will ease food prices and cool the overall inflation from the current 10.55 per cent.

Inflationary pressure was being felt as fuel and other articles started affecting it, Mukherjee told a press conference after meeting the chief ministers of the southern states.
He said the growth in overall inflation will slow down after the moderating impact of fresh arrival on food prices.
“Inflation is always a matter of concern but it is no longer confined to food articles though they have been of particular concern in December when the food inflation rate touched 20 per cent,” the Finance Minister said.
Earlier in the day, Cabinet Secretary K M Chandrasekhar had also said that inflation will drop in the coming months on good monsoon and prospects of better crop yield.
“Experts are saying that inflation will be 5-6 per cent by year end…I don’t have any reason to disbelieve them,” he said.
From 20 per cent in December, food inflation has now come down to 12.81 per cent, despite slight increase in the latest figures.
The Government had last month hiked petrol prices by Rs 3.50 a litre while deregulating it and slashed diesel prices by Rs 2 per litre, LPG by Rs 35 a cylinder and kerosene by Rs 3 a litre.
The hike in fuel prices pushed inflation to 10.55 per cent in June from 10.16 per cent and prices are likely to shoot up further in July when the full impact of the hike will become visible.
Earlier, the Finance Minister had said that the hike in petroleum products will add less than a percentage point to the overall inflation.
He said the Agriculture Ministry has been striving to fill the deficit in pulses and edible oils–two products responsible for fueling food prices.
“We have decided to dedicate 60,000 villages to cultivate pulses and edible oil crops for which Rs 300 crore has been earmarked. We currently have a shortfall of five million tonnes of pulses and 3-4 million tonnes of edible oils,” the Finance Minister pointed out.
To a question, he said the amount of subsidies on food articles, to be distributed under the proposed Food Security Act, would be determined by the Planning Commission after arriving at the final count of below poverty line families in the country.
“We will work out the financial implications of implementing the Food Security Act after the number of BPL families is determined by the Planning Commission. We are committed to the Food Security Act, which we promised in our election manifesto,” the Finance Minister said.
He said the Government is currently seeking suggestions from various stakeholders on the proposed law.
Food grain production, which is currently between 225 million tonnes and 300 million tonnes, needs to go up substantially for the scheme to be effectively implemented.