Inflation will drop to seven percent by March 2011: Montek Singh Ahluwalia

Tuesday, February 15, 2011

NEW DELHI - Planning Commission Deputy Chairman Montek Singh Ahluwalia today said inflation would drop to seven per cent by March this year.

Talking to reporters on the sidelines of a conference here, Ahluwalia said: “The 8.2 percent number shows a small reduction. I expect that the deceleration in inflation will continue.”

Addressing a poser on the role of fiscal stimulus during the financial year, Ahluwalia said that post-recession, India has thoroughly recovered in a very short period because of the fiscal policy.

“We are facing today a very different problem from what we were facing two years ago. But there is no doubt that the recovery of economic growth to 8.2 percent this year suggests that the growth objective has certainly been achieved. It has been achieved in a very short time and better than many people thought it would. Of course, we now have the problem of inflation, which is worrying us all. And we are handling that,” he added.

Inflation declined marginally to 8.23 per cent in January from 8.43 per cent in the previous month, as prices of certain commodities like wheat, pulses and sugar eased, although essential items like onion and other vegetables continue to remain dearer.

However, vegetable and fruits continued to remain expensive. On an annual basis, vegetable prices rose by 65 per cent, and onion prices nearly doubled. Also, fruits became costly by 15.01 per cent and egg, meat and fish by 15.09 percent.

Overall, primary articles became costly by 17.28 per cent with food articles rising 15.65 per cent. In the non-food articles category, fibre prices rose by 48 per cent on an annual basis.

Prices of fuel and power shot up by 11.41 per cent, with petrol rising 27.37 per cent on an year-on-year basis. However, among manufactured items, sugar prices fell by 15 per cent, while edible oils turned costlier by 7.16 per cent. (ANI)

Filed under: India

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