Food inflation may ease, WPI unlikely to hit double-digits: Montek

High food inflation is likely to ease in the next few months as rabi harvest is expected to be good, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Friday.

“I expect food price inflation to come down in the next couple of months on the back of an (expected) good rabi crop,” Mr. Ahluwalia said at a conference here on Friday.

Downplaying fears of WPI inflation touching double-digits, he said, “I don’t think this will happen. I expect WPI inflation to gradually come down...you will see that.”

With the growth momentum returning, the Commission sees a GDP growth of 8.5 per cent for FY 11 and 9 per cent in the subsequent fiscal.

“I think the economy is doing very well...we have weathered an extra-ordinary crisis...now we are well set to get back to 8.5 per cent (GDP growth) in 2010-11 and hope to see 9 per cent growth after that,” Mr. Ahluwalia said.

“We are going to get back to the path of fiscal prudence,” he said, adding that with the economy improving institutional investments will continue to invest.