After Narendra Modi government increased the minimum support price for 14 kharif crops, A Prasanna, Chief Economist, I-Sec PD, said he is pencilling in around 50 bps impact on headline inflation over the next 12 months.

Speaking to CNBC-TV18, Prasanna said, "When it comes to rice, the procurement mechanism is in place and I assume that the government procures the similar quantity like it did last year. We would expect the market price of rice to go up."

According to Prasanna, after the increase in minimum support price, inflation and price of pulses can also go up.

He also said that there is a good probability that Q4 inflation could be five percent and above.

First Published:Jul 5, 2018 10:46 AM IST