The Prime Minister’s key economic advisor C. Rangarajan today hoped that inflation would come down to 6.5 per cent by end-March and suggested that steps should be taken to release more food stocks to ease the price pressure.
The wholesale price index-based (WPI) inflation eased to 6.62 per cent in January from 7.18 per cent in December 2012, according to official data released today.
“The decline in inflation is a welcome and reassuring sign. I expect March-end inflation to be 6.5 per cent,” said Rangarajan, the Prime Minister’s Economic Advisory Council (PMEAC) Chairman, adding that January inflation has moderated more than expected.
This is the fourth straight month of decline in the WPI numbers.
Retail inflation, however, remained in double digits at 10.79 per cent in January mainly on account of higher prices of vegetables, edible oil, cereals and protein-based items.
Rangarajan said with the moderation in manufacturing or core inflation in January, there was a need to focus on the supply side easing of food articles.
“Retail inflation is still high. The WPI inflation in primary and food articles is at higher levels. Efforts should be made to release larger stocks of food articles in the market,” Rangarajan said.
Inflation in the manufactured items category witnessed a decline and stood at 4.81 per cent in January, from 5.04 per cent in the previous month.
Rangarajan said he expects core inflation to be below 4 per cent by end-March.
Inflation in the food articles category, which has a 14.3 per cent share in the WPI basket, rose to 11.88 per cent in January, from 11.16 per cent in December.
Prices of onion witnessed a sharp increase by 111.52 per cent during January. The rate of price rise was 69.24 per cent in December 2012. Vegetables became dearer by 28.45 per cent and potatoes by 79.07 per cent in January as compared to the same period of last year.