Inflation will taper to 6.5%, says Govt

Rise in petrol prices is expected to fuel inflation

“It will be around 6.5 per cent by March end,” Finance Secretary Ashok Chawla told reporters here. The finance secretary’s remarks came even as expensive food items jacked up overall inflation, measured on the basis of wholesale prices, to 8.43 per cent in December from 7.48 per cent in November.

Also, the government’s move to raise petrol prices is expected to fuel inflation. “Six months ago we may have said inflation will be 5.5-6 per cent (by March end). Since it is always a dynamic process, today nobody is saying because the trend has not really gone down,” Chawla said.

He, however, added that inflation is coming down. The wholesale price rise in December has also prompted the Prime Minister’s Economic Panel to further revise upward the March-end inflation forecast to up to seven per cent from 6.5 per cent estimated earlier.

Food inflation has also remained high through December, touching the year high level of 18.32 per cent. It finally eased somewhat for the week ended January 1 to 16.91 per cent.

The government, recently, unveiled measures to check spiralling prices by deciding to continue ban on exports of edible oils, pulses and non-basmati rice and asked states to waive local taxes on essential commodities.