“Inflation is still above the RBI’s comfort level, and it should come down further. The figures reflect that inflation is coming down. This is definitely encouraging,” said Montek Singh Ahluwalia, Planning Commission Deputy Chairman, here on Thursday. Worryingly high inflation has been a cause for the Reserve Bank of India’s reluctance to cut interest rates in order to stimulate investment and spending.
The economy is expanding at its slowest pace in a decade, with the gross domestic product estimated at 5 per cent in the fiscal year ending in March. Mr Ahluwalia said growth had been a concern over the past three months. “While inflation is coming down, growth remains below the natural growth rate. However, revival steps have been taken,” he added.
The Planning commission, he said, was expecting a “reasonable” increase in Plan expenditure in 2013-14.
“We are the spokespersons for development. I believe that we will get a reasonable increase (in Plan expenditure for 2013-14). But I do think that the fiscal deficit objective must be met,” Mr Ahluwalia added.