No hurry to tighten monetary policy, says Mukherjee

Banking on a normal monsoon, finance minister Pranab Mukherjee said on Monday that the prices of essential commodities would ease next month, and he saw no case for tightening monetary policy.

As wholesale price inflation climbed to a headline 10.16 per cent in May showing no signs of cooling, the finance minister said prices would begin to ease once it is clear monsoons are normal.

"After July, the trend of the monsoon will become known. Inflationary pressure would start coming down," he told reporters on the sidelines of a banking conference in New Delhi.

Wholesale Prices-based inflation provisionally touched a 19-month high of 10.16 percent in May, while final figures released for the month of March put inflation at a much higher 11.04 percent.

The India Meteorological Department expects monsoon, which accounts for 80 per cent of the rain the country receives, to be near normal this year. A poor monsoon last year hit crop production, fueling rise in prices of food items.

The Reserve Bank of India (RBI) expects inflation to soften around mid-2010 on a normal monsoon and moderation in food prices and has forecast the March 2011 Wholesale Price Index (WPI) inflation at 5.5 per cent.