Economic Survey pegs inflation at 6.5-7 percentMarch 15th, 2012 - 2:30 pm ICT by IANS
New Delhi, March 15 (IANS) The Economic Survey for 2011-12 tabled by Finance Minister Pranab Mukherjee in parliament Thursday pegged inflation at 6.5-7 percent by end of March and projected a further moderation in the next fiscal.
“A favourable base effect in prices and continued global slowdown are expected to moderate inflation to around 6.5 to 7 percent by March and further moderate in the months ahead, barring unexpected shocks, such as oil prices in international markets,” the survey said.
It may further moderate during 2012-13 due to tightening of monetary policy and other measures put in place by the government,” it added.
Inflation in the current fiscal has largely been driven by high food prices. It had slipped to a low of 6.6 percent in January, but rebounded to almost 7 percent in February.
The survey, however, said that fiscal consolidation was the only way to keep inflation down.
“Rapid fiscal consolidation is the only way out to keep inflation down and aim for robust growth. The principle way in which this has to be achieved is by raising our tax-GDP ratio and cutting down wasteful expenditures,” said the document.
The survey said that monetary measures by the Reserve Bank of India (RBI) and its impact on curbing inflation needed to be studied further to improve efficiency of such actions in the future.
Incidentally, the RBI in its mid-quarter review of the monetary policy Thursday left key rates unchanged, citing upside risks to inflation.
Also the government needed to ensure that supply side problems in food items were addressed to improve productivity. The survey recommended reforms in the way mandis conducted their business — something which would be beneficial to organised retailers.
“Improved mandi governance is an area of concern. A greater number of traders must be allowed as agents in mandis. Anyone who gets better prices and terms outside the Agricultural Produce Marketing Committee (APMC) or its farmgate should be allowed to do so,” the survey said.
Another key recommendation is taking out perishable items from the ambit of the APMC act as the government regulatory mandis sometimes prevent retailers from integrating their enterprises with those of farmers.
- Economic survey bats for FDI in multi-brand retail - Mar 15, 2012
- Highlights of the third quarter review of monetary policy - Jan 24, 2012
- Inflation to be high till fiscal consolidation is complete: Experts - Sep 17, 2012
- RBI mid-quarter policy review highlights - Mar 15, 2012
- Inflation too high, says RBI; defends tight money policy (Lead) - Jun 19, 2012
- 'India will grow at 7.6 percent, to play active global role' (Roundup) - Mar 15, 2012
- Rate pause will help regain growth momentum: Pranab - Dec 16, 2011
- Highlights of Indian central bank's monetary policy update - Jul 26, 2011
- GDP to grow at 8 percent this fiscal, inflation high till September: FICCI - May 30, 2011
- Inflation still above acceptable levels: Subbarao - Jun 19, 2012
- Price stability needed to sustain growth: Pranab - Jun 16, 2011
- With inflation easing, India's central bank halts rate hikes (Roundup) - Dec 16, 2011
- Shifting focus to growth, RBI infuses Rs.320 bn into system (Roundup) - Jan 24, 2012
- Growth could be lower than anticipated: RBI - Jan 23, 2012
- India's central bank infuses more money into system (Lead) - Jan 24, 2012
Tags: apmc, bank of india, economic survey, finance minister, fiscal consolidation, food items, food prices, gdp ratio, global slowdown, international markets, marketing committee, moderate inflation, monetary measures, monetary policy, oil prices, pranab mukherjee, produce marketing, rbi, reserve bank of india, robust growth