NEW DELHI: Prime Minister’s economic panel today said that average inflation this fiscal may ease to 6 per cent from about 9 per cent at present.
“I think it (inflation) will be around 6 per cent… probably that is where it will settle down,” Prime Minister’s Economic Advisory Council ( PMEAC )) Chairman C Rangarajan said on the sidelines a CUTS event here.
Wholesale price inflation (WPI) in March rose to 8.98 per cent, higher than Reserve Bank’s projection.
“I think the inflation will come down in April. What happened in March was quite unexpected… but the food price inflation is coming down. The wheat production is very good. Therefore, I expect the food prices to come down further in April and that should help in the overall headline inflation coming down,” Rangarajan said.
On the impact of rising crude oil prices on inflation, he said, that has been shielded so far as retail prices have not been adjusted to international crude prices, particularly with respect to diesel.
“But for some more time, probably we might be able to shield the diesel prices from external influences. About 3-4 months from now when inflation rate falls to a much lower level, perhaps we will have to take a decision on what to do with the diesel prices,” Rangarajan said.
When asked if the Greece debt crisis could hit foreign capital flows into India, he said, that may not have a direct bearing on the inflows.
“Total quantum of fund flowing into the emerging market may come down a little bit but as far as India is concerned what will decide it (inflow) will be the perspective on India’s growth and India’s strength and I do not think it will be seriously affected,” he said.