Inflation to come down to 7 pc by March, says Montek

KOLKATA - The current inflation is a “seasonal spike” and it will come down to 7 percent by March this year, Planning Commission Deputy Chairman Montek Singh Ahluwalia said Friday.

“A lot of inflation occurred in the last two months led by price hike of non-cereal goods. This is a seasonal spike, it will reverse by six weeks. The government is taking steps to tackle it. We hope that we will bring this down. By the end of March, overall inflation rate will come down to seven percent, Ahluwalia told reporters here.

“We have been able to control the prices of food grains, but non-foodgrain inflation is very high, he said.

“Inflation rate was low till November last year. Because of un-seasonal rain food inflation has increased very severely. New crops will come and inflation rate will be down soon, Ahluwalia stated.

The solution to rein in high food inflation was more supply, logistic and marketing of food grains, he opined.

“My view is you should not ban export. To control high food inflation you should import a few items for sometime now we are importing onions from Pakistan, but export of food items should not be banned,” he averred.

To a question whether the centre should fix prices of food items, he said, “I do not agree that the government can rigidly fix prices. Some variation of prices can occur.”

Stating that high inflation was a global phenomenon, the renowned economist said, “Every country is facing price pressure. Prices are high in China and in Indonesia.

“But we should do more to rein in inflation, he added.