Good wheat crop to ease inflation: Montek

"This season very good harvest (wheat) is coming in. There is ample stock of foodgrain in the country. So the inflation psychology would be broken," Ahluwalia told reporters here. The wholesale price index (WPI) is currently nearing the double-digit mark, with the March-end figures at 9.90 per cent, much higher than the RBI estimates of 8.5 per cent.

"I am concerned about the current inflation (WPI). It is too high for comfort right now," he said. "In next 2-3 months we will see decline in inflation." To rein in inflation, the government has taken several measures which include cutting import duties on certain essential items like rice, wheat, pulses, and banned exports of certain others like non-Basmati rice, edible oils and pulses.

The central bank in its monetary policy review on April 20 has projected inflation to be only 5.5 per cent for March 2011, as the base effect will come into play. To strike a balance between growth and inflation, the RBI had hiked key policy rates and cash reserve ratio by 25 basis points each. The moderate projection of inflation at 5.5 per cent also assumes that the monsoon would be normal and commodity prices would not firm up, RBI had said in its policy statement last week.