Prime Minister's Economic Advisory Council Chairman C. Rangarajan expects inflation to moderate to 7 per cent by the end of the current fiscal.
Speaking to reporters on the sidelines of the foundation day celebrations of the Institute for Development and Research in Banking Technology (IDRBT) here on Monday, Dr. Rangarajan said food inflation was coming down because of good monsoon and it was expected to ease further. In the backdrop of food inflation pegged at 9 per cent last week, he said improvement witnessed on the supply side was resulting in moderation of food and vegetable prices.
The movement in global commodity prices had bigger implications and the impact was expected to be more on India which was importing a major chunk of its crude oil requirement. “The commodity prices internationally are likely to come down if there is no strong growth in the world economy,” he said.
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Asked about the impact of rupee depreciation, Dr. Rangarajan said it would be felt on the import prices of commodities such as oil, but it was difficult to ascertain the exact impact as yet.
Earlier, delivering the IDRBT foundation day lecture, he exhorted banks to piggyback on the mobile telephony platform, with 700 million mobile connections in place, to achieve financial inclusion.
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Harnessing technology held the key for banking and it could use the mobile banking and business correspondent models.
Dr. Rangarajan stressed the need for urgent resolution of data quality and consistency as they did not reflect levels of comfort. Banks, which accumulated IT infrastructure over the years, could now explore consolidation to improve efficiency and minimise costs.
IDRBT Director B. Sambamurthy welcomed the participants while its Chairman and RBI Deputy Governor Anand Sinha explained the achievements made by the institute over the past decade.