We will bring inflation down: Montek (Roundup)

July 2nd, 2008 - 9:55 pm ICT by IANS  

New Delhi, July 2 (IANS) Terming the 13-year high inflation of 11.42 percent as a short-term challenge, India’s Planning Commission deputy chairman Montek Singh Ahluwalia Wednesday said the government would bring it down. “We will bring inflation down, but speculating on what is happening in international oil market is very difficult,” Ahluwalia told IANS after delivering the 13th annual Prof. G. Ram Reddy memorial lecture here Wednesday.

“If properly handled, inflation should not affect the medium-term average growth rate of 9 percent in the 11th Plan period (2007-2012),” he said.

He did not specify how the government would moderate inflation, which has been maintaining an upward trend despite several monetary steps like tightening of money supply and administrative measures to rein in prices.

Ahluwalia, however, admitted that the growth rate in the current fiscal could decelerate to settle at around 8 percent in view of rising prices of crude oil in the international market.

“In the current fiscal, I have said on many occasions, the growth rate will be somewhere around 8 percent. If it is less than 8 percent, say, 7.9 percent, we do not make such precise assessment,” he said.

India’s largest university imparting distance education - the Indira Gandhi National Open University (Ignou) - had organised the lecture on “Challenges of Inclusive Growth”, which was attended by academicians from various universities.

The economy of India logged a 9 percent growth rate in 2007-08, and Ahluwalia said economy needed to grow in the range of 7 to 11 percent for a decade to double the people’s income.

The government has set a target of 10 percent growth rate in the final year of the 11th plan period.

The finance ministry Tuesday had issued a statement saying that prices of a number of essential articles showed a declining trend in the week ended June 1.

“The government is taking measures to moderate the inflationary pressures,” the ministry said in a statement, without specifying the measures.

Referring to the problem of poverty, Ahluwalia said: “Progress is there. Growth is taking place, but poverty is not going down as fast as it should have been. Over 22 percent of the population still lives below the poverty line.”

He emphasised the need of providing quality health, education and infrastructure facilities to the people on the margins.

Since agriculture is the mainstay of Indians’ livelihood, Ahluwalia said there was a need to sustain 4 percent growth in the farm sector, which clocked 4.5 percent growth in the last fiscal.

“Over 50 percent of the population in India depends on agriculture. During 1996-2004, agriculture growth slipped to around 2 percent. We need to take several measures to increase foodgrains production by over 2 percent,” he said.

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