With the rate of price rise moderating in recent months, Prime Minister Manmohan Singh on Monday exuded confidence that inflation will stabilise at around 5.5 per cent by March next year and the economic growth will improve to 8.5 per cent.
“Inflation remains a cause for serious concern in our country... We expect this downward trend to continue and the rate of inflation to stabilise around 5.5 per cent by next March,” he said while addressing the 83rd Plenary Session of the Congress Party.
Inflation, which has become a politically sensitive issue, declined to 7.48 per cent in November from 8.58 per cent in the previous month.
It was in double digits for several months till July.
Food inflation, however, rose to 9.46 per cent for the week ended December 4, from 8.69 per cent in the previous week.
Pointing out that the government had taken several steps to check rising prices, the Prime Minister said, “We will continue to do so... In recent days, the rate of inflation has come down to 7.5 per cent.”
Referring to economic growth, Dr. Singh said that despite the global economic crisis, the country has been able to maintain a healthy growth rate.
“In the last two quarters, our growth rate has been 8.9 per cent and we expect that for the entire year, it will be around 8.5 per cent. We also expect that from the next year onward, we will be able to grow at a rate between 9 and 10 per cent.”
The Indian economy was expanding at over 9 per cent before the global financial meltdown dragged down the growth rate to 6.7 per cent in 2008-09. Thereafter, spurred by the stimulus provided by the government and the Reserve Bank, the growth rate improved to 7.4 per cent during 2009-10.
As regards the current fiscal, the economy recorded a growth rate of 8.9 per cent in the first half. According to the mid-year analysis prepared by the Finance Ministry, growth for the whole year could be 8.75 per cent, with a variation of about 0.35 per cent on either side.