Inflation has “peaked out” and Wholesale Price Index (WPI) is expected to come down to around 6-6.5 per cent in December, C Rangarajan, Chairman of Prime Minister's Economic Advisory Council, said.
By March, WPI inflation is expected to be between 6 and 6.5 per cent levels.
“...there are already indications that in December the vegetable prices have cone down very sharply. Therefore when December numbers (WPI) are available in the middle of January, I expect the inflation rate to come down by 1-1.5 percentage points,” he told
Rangarajan was in the city to attend the convocation ceremony of the Indian Statistical Institute (ISI). He is also the President of ISI.
Inflation, he said, was fueled by rise in price of vegetables and food articles “other than food grains”.
WPI index in November 2013 stood at 7.5 per cent. December WPI numbers are expected later this month.
A “sharp” dip in the price of vegetables in December is cited as the reason for inflation to come down.
According to Rangarajan, growth too is expected to pick up in the next fiscal to around 6-6.5 per cent. For the current fiscal though it is likely to remain around the 5 per cent.
“For FY14 it (growth rate) will be be around 5 per cent. There are reasons to believe that the growth can pick up further in the coming fiscal,” he said.
Faster completion of projects even at the current investment and savings rate would help bring the economy notch up a growth rate of around 6.5 percent.
“Investment rate continues to remain high and therefore you take efforts to speedily complete the projects. Even with the current investment and savings rate, we should be able to get back to 7.5 per cent very quickly,” he said adding that “growth rate next year (likely) to be between 6 and 6.5 per cent.”