Inflation to moderate in 3-4 months, says Ahluwalia (Lead)

August 25th, 2008 - 10:34 pm ICT by IANS  

New Delhi, Aug 25 (IANS) Planning Commission Deputy Chairman Montek Singh Ahluwalia, unperturbed by India’s 16-year high inflation rate of 12.63 percent for the week ended Aug 9, Monday said it will moderate in three to four months and agriculture will grow at a higher rate than projected. “It is not important whether inflation touches the 13-percent mark but the fact that it will start moderating within three to four months,” Ahluwalia told IANS on the sidelines of a function to launch the book “Reforming Indian Agriculture: Towards employment generation and poverty reduction”, edited by Sankar Kumar Bhaumik.

“The actual rate of inflation is seven to eight percent. I have been saying that inflation we are currently witnessing is not going to stay for long. I reiterate that it is a short-term problem,” he said.

Ahluwalia’s optimism is in stark contrast to the concern of the finance ministry, which recently said inflation was a “matter of concern” and a “major disappointment”.

“Agriculture will grow at much higher rate than what’s being projected,” Ahluwalia said in an apparent reference to the assessment of the Prime Minister’s Economic Advisory Council that agriculture would grow at two percent this fiscal.

He also spoke about heavy subsidies and increase of public investment in the farm sector.

“In the last three years, things have picked up and four percent growth in agriculture is visible,” Ahluwalia said.

“Three percent growth in agriculture in the current fiscal is guaranteed. It can even go up to four percent,” said Planning Commission member Abhijit Sen.

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