Rising inflation worrisome

“Economy is now on path of sharp recovery. We are confident of achieving growth rate in the range of 8.25 and 8.75 per cent in the current fiscal. We should look forward to hit 9 per cent plus growth path in near future,” he said inaugurating the two-day Economic Editors Conference here on Tuesday.

Mukherjee admitted that the high price level of essential commodities including food items, which were primarily driving inflation upward, was a matter of “concern”.

Asserting that the government would continue to take necessary fiscal and monetary measures to control price rise, he projected that inflation would come down to 6 per cent by end of this fiscal.

“It will be ideal to bring down inflation to 4 to 5 per cent. But it will be difficult to achieve this,” he admitted.  

He hoped that the series of anti-inflationary measures taken by the government and those by the Reserve Bank would bring the inflation down to six per cent by the end of this financial year.

“We have taken steps to improve the supply side by easing import of foods, which are in short supply. On the demand side, the latest revision in key rates have created a situation where a part of the excess liquidity would be mopped up by the RBI,” Mukherjee said.

“We are working on necessary policy initiatives through which we can strike a balance so that the growth is not retarded and at the same time inflationary pressure is being reduced,” he said.

No control on FII inflows, avers FM

The government, on Tuesday, ruled out putting controls on FII inflows into the equity market as of now, but said RBI may intervene to check rupee appreciation if needed.

“At this time, I am not thinking of putting cap on FIIs (inflows in equity market),” Finance Minister Pranab Mukherjee told reporters at the annual Economic Editors’ Conference here.