Montek hints at more anti-inflation steps

By Vrishti Beniwal

New Delhi, May 6: A high rate of inflation notwithstanding, the economy is expected to register eight per cent growth in the current fiscal, the planning commission deputy chairman, Dr Montek Singh Ahluwalia, said.

Talking to reporters on the sidelines of a conference on Tuesday, Dr Ahluwalia said more measures could be considered to rein in inflation if prices do not soften. He, however, did not elaborate on the measures that could be taken.

Asked whether he meant administrative measures (action against hoarders), as suggested by finance minister P. Chidambaram, he said under the Essential Commodities Act, states have full authority to take action against hoarders.

Inflation had touched a 42-month high of 7.57 per cent for the week ended April 19 as compared to 7.33 per cent in the previous week. Presently it is at a three-year high.

"We are not at all happy with the rate of inflation. It should comedown. The government has already taken various fiscal and monetary measures to curb inflation. The impact of these measures can’t be instant. I expect inflation to come down in next few weeks," he added.

Even as finance minister P. Chidambaram has maintained that the some growth could be compromised to check rising prices, Dr Ahluwalia allayed fears that steps taken to contain inflation would hurt growth. "Inflation is not anti-growth. It will help growth in the medium term," he pointed out.

The Reserve Bank of India in its recently announced annual monetary policy had projected the economy would grow between 8 per cent and 8.5 per cent during the current year, compared with a growth of 8.7 per cent in the previous fiscal.

Economic think tank NCAER on Tuesday also projected the economy to grow at 8.5 to 8.9 per cent during 2008-09. It said inflation during the year is likely to be in between 4.9 per cent and 5.2 per cent against 4.4 per cent last year.

By arrangement with Financial Chronicle