Chandigarh: Inflation is expected to come down to 5.5% by March 2011, Prime Minister’s Economic Advisory Council chairman C Rangarajan said on Monday.
Besides, the PM panel also sees the country to achieve a GDP growth rate between 8.5- 9% in the current fiscal.
“I think by March (2011), we can expect (WPI) inflation to come down to 5.5%,” Rangarajan said on the sidelines of the 93rd annual conference of Indian Economic Association here.
“I think any level of inflation beyond 5% (threshold level of inflation) is uncomfortable,” he asserted.
The wholesale price index-based inflation stood at 7.48% in November against 8.58% in October while food inflation shot up to 12.13% for the week ended 11 December.
Asked about the possibility of hardening of interest rate in January in the wake of double digit food inflation, Rangarajan said it would depend upon how inflation behave in coming weeks.
“It (rate hike) all depends upon how overall inflation behave in coming weeks ... I think if there is further fall in WPI inflation then Monetary Policy would remain as it is now ... they (RBI) have not made any change in policy rate ... we need to watch the behaviour of overall inflation before monetary authorities can take any decision,” he said while asserting that there was a possibility of moderation in inflation even though food inflation have shown rise.
Asked about the GDP growth, Rangarajan said against the forecast of 8.5%, the country could achieve higher growth. “We had forecast the GDP of 8.5% we will achieve 8.5% ... perhaps we will do better than that ... I expect growth rate between 8.5% and 9%,” he said.