RBI step in to check inflation, says Basu

“The inflation figure in March will be on the higher side. But if the rise is across-the-board, some tight monetary measures can be expected from the Reserve Bank,” Basu said.

“If the inflation is not high across-the-board, when we break it up, there will not be any action,” he said, adding, “the higher IIP index will not increase fears of inflation.”

According to Basu, it is expected that March inflation will  be high. From July onwards, however, inflation will become very low, he said. “The base effect will come into play in the next three months. From July onwards, it will be very low,” he said. An average monsoon would help in alleviating inflation but if there is a drought like last year, then there would be some upward pressure on prices, he pointed out.

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