Chief Economic Adviser KV Subramaniam said inflation based on consumer price inflation had crossed the prescribed limit for three consecutive quarters in the last financial year.
Chief Economic Adviser KV Subramaniam
KV Subramaniam, Chief Economic Advisor, Ministry of Finance said that retail inflation will come down to 6 per cent in July itself but will remain above 5 per cent for a few months. He said that in this way the level of price increase will then come within the upper end of the target given to the Reserve Bank (RBI). Subramaniam said inflation based on consumer price inflation had crossed the prescribed limit for three consecutive quarters in the last financial year. According to him, this was due to supply side problems like difficulty in carriage of goods.
“With reasonable probabilities, I expect this month’s (inflation) print to come below 6 per cent,” he said at a conference organized by industry body Ficci. Subramaniam said that after seeing inflation at 6.4 per cent in May’s figures, he had said in internal meetings and during consultations with the regulator (RBI) that it will now calm down.
Inflation rises as commodity prices rise
He said that despite the challenges posed by factors like increase in commodity prices (crude oil etc.), month-on-month growth in it has remained in a limited range. In FY21, the Chief Economic Advisor had said that the first wave of the pandemic had affected inflation, which lasted longer, while the second wave saw a distributed lockdown and did not have a significant impact on inflation.
MPC meeting will be held from 4 to 6 August
Despite the spurt in inflation, RBI has been keeping rates unchanged to support growth. However, after the recent data, concerns have been expressed over the hike in prices. The next monetary policy meeting of the central bank will be held from August 4 to 6.
India to register 7 percent growth in the next financial year
The Chief Economic Advisor said that India will register a growth of 6.5 to 7 percent in the next financial year 2022-23. In the subsequent years, due to the reforms carried out by the government, the growth rate will reach 8 percent. He said that despite the pressure on revenue collection, the government will meet the fiscal deficit target of 6.8 per cent for the current financial year.
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