Budget proposals to push up inflation marginally: Govt

The government on Friday said the budget proposals will push up prices marginally by 0.4 to 0.43 per cent in the immediate run.

“It (budget proposals) is going to cause a blip right now...our calculation is 0.4 to 0.43 per cent,” said Kaushik Basu, Chief Economic Adviser, while answering questions on the impact of budget proposals on inflation at the customary post-budget press briefing.

Finance Minister Pranab Mukherjee in his Budget raised duties on consumer goods, including cars, tobacco, petrol, diesel etc.

Inflation, which at one point was below zero, soared to 8.56 per cent in January, surpassing the RBI’s year-end projection of 8.5 per cent.

According to Mr. Basu, inflation was likely to remain firm for some more time but would remain within the double-digit mark till March-end.

Replying to questions on the changes in the duties on petroleum products, Finance Secretary Ashok Chawla said petrol and diesel will go up on account of additional taxes but hike in retail prices would have to be decided by the companies.

Referring to assumptions in the Budget, Mr. Chawla said the government estimated a GDP growth rate of 8.5 per cent.