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    HomeNewsBusinessEconomyRangarajan sees inflation at 6-6.5% by March

    Rangarajan sees inflation at 6-6.5% by March

    There is room for monetary action on the inflation front according to Prime Minister's Economic Advisory Council Chairman C Rangarajan. He expects the figure to be between 6-6.5% by the end of March.

    January 05, 2011 / 17:02 IST

    There is room for monetary action on the inflation front according to Prime Minister's Economic Advisory Council Chairman C Rangarajan. He expects WPI inflation to be between 6-6.5% by the end of March. "Inflation above 4% is uncomfortable and if it remains sticky, RBI steps may be needed. We may see action from the Reserve Bank by mid-January if inflation is firm," he says adding that the quantum of any rate hike depends on inflation.


    Further he states that the government should guard against food inflation spreading to other sectors. He also alarms the spill over of untamed primary article inflation as well. "Price stability has to become the dominant issue for monetary policy in India," Rangarajan adds.


    Food inflation accelerated to above 14% in mid-December on the back of high onion and vegetable prices and annual headline inflation, currently at 7.48% in November, could accelerate further in December.


    Talking about fiscal deficit, which has been a matter of grave concern, Rangarajan says he sees the government meeting its fiscal 2011 aim. "There is no need for extra borrowings this fiscal. We also expect the liquidity situation to improve this quarter," he points out.

    Commenting on the talks about government deregulating diesel prices, he says it may do so when inflation eases.

    first published: Jan 5, 2011 04:15 pm

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