Rising inflation worrisome: FM

Says food prices will ease post Rabi crop

“We are quite hopeful of 7.5 per cent GDP growth in 2009-10 but 8.5 per cent rise in Wholesale Price Index-based inflation is disturbing,” he said.

Mukherjee, however, projected that food prices, would moderate in the coming months after the arrival of Rabi crop in the market.  As the pressure on food prices would ease with the arrival of new crop the inflation would cool down, he said.

Much to the discomfort of the government now facing a challenge to rein in rising prices of essential commodities the WPI-based inflation shoot up to 13-month high of 8.56 per cent in January this year with key food items becoming costlier.

Food inflation has risen sharply by nearly 18 per cent in the week ended January 30. Further, Mukherjee said that the government has taken adequate measures to tame inflation, while pointing out that it will take a few months for the same to bear fruit. We have taken measures on the supply side to make more quantities of grains and pulses available for the people at large, but this will take some time to have the desired impact on rising prices particularly of essential commodities, he said.

Confident on growth

On GDP growth rate for the current fiscal he said the economy was projected to grow by 7.5 per cent in 2009-10 and could cross 8.5 per cent in 2010-11 due to recovery in industrial production.

The industrial production posted a growth of  16.8 per cent in December last year –– considered to be the highest in the last 16 year. This impressive industrial growth rate has come about primarily due to robust performance by the key manufacturing sector especially the  consumer durables segment.