"Food inflation will be a challenge and a top priority for the government," he said, speaking at an event.

He said tackling food inflation, which came in at 9.56 percent in July, will "always be a challenge".

The government has taken a slew of measures on the supply side to cool the price rise in food items like the decision on the APMCs.

Jaitley also explained the limitations of policy measures, saying there is a seasonal element as well.

Stating that the government's measures on curbing price rise of onions like action against hoarding worked, Jaitley acknowledged that the government had to quickly change tack and reduce tomato prices which started rising.

He, however, said when it comes to grains, the country has no reason to worry as it has sufficient food stocks.

"The real food grain will itself not be such a challenge because we have a surplus availability," he said.

The food inflation for July came in at 9.36 percent, as against the 7.97 percent in June, and was the main factor driving the acceleration in the headline CPI-based inflation to 7.96 percent.

The RBI wants to contain the headline number under 8 percent by January 2015 and reduce it further to 6 percent by January 2016.

The RBI, which recently said that there are "upside risks" to its January 2016 target, has been asking the government to initiate supply side measures.

PTI