The overall inflation will come down to seven per cent by March, said Deputy Chairman of Planning Commission Montek Singh Ahluwalia on Friday."The overall rate of inflation will come down to seven per cent by March", Ahluwalia told reporters at a news conference organised by the Indian Chamber of Commerce in Kolkata.
Stating that inflation was a serious problem and the government was aware of it, Ahluwalia said high food inflation was a "seasonal spike" and will come down.
"But I will not be able to tell you where the food inflation will go," he said.
Ahluwalia said food inflation was high because of high prices of onion and vegetables. "Once the new crop is available in the market, food inflation will come down."
He said all the emerging markets in the world were experiencing price pressure and the situation "is not unique to India".
While supply of food-grains could be arranged through imports, this was not true for vegetables. "Import of vegetable is very expensive", he said.
Ahluwalia said inflation has been "efficiently" brought under control this year. "Last year it was very high," he said.
Pitching for modernisation of marketing arrangement for agri-produce, he said this would also help in taming food inflation.
For this, the APMC Act would have to be drastically altered, the deputy commissioner of the Planning Commission said.
Commenting on current account deficit, he said it was at 3.5 per cent of GDP, which was not comfortable.
However, he said this (CAD) would not be a problem as the country had the ability to finance it.
"We have large reserves. I expect that the CAD would remain at 3.5 per cent in the coming year as well," he said.
Asked for his comments on FDI in retail, he said the Planning Commission's view was that it was not a bad idea.
"The key issue is modernisation of agriculture marketing rather that retail in FDI," he said.
Earlier speaking at the Indian Statistical Institute, he cited the interim statistical data provided by NSSO and said there had been a sharp reduction in poverty.
"But this is not disclosed officially," he said. The official figure would be made available next year, he said.
Ahluwalia said that by the end of 11th Five Year Plan, the agricultural growth would be around 3.5 per cent.
He also urged the statistical community for providing better quality of data on social issues, as it was needed in formulating government policies.
