Concern on inflation is overblown: Anant

KOLKATA: The country’s new chief statistician, TCA Anant, said the economy still has some miles to go before industrial stability sets in.

“Industrial growth isn’t so strong as one would have liked it to be,” Mr Anant said on Thursday, referring to the monthly volatility of the IIP (Index of Industrial Production) series. IIP growth slipped to 7.1% for June, against 11.5% in the preceding month.

The Delhi School of Economics professor, however, said he seldom reacts to monthly numbers as these stats don’t indicate any long-term trend.

Mr Anant added the linkage of domestic petrol prices to international crude prices will curtail inflationary pressure in the future.

“The linkage will encourage industries to explore input substitution and adopt energy-efficient systems and this will have a dampening effect on inflation in the long run,” Mr Anant said, at an interactive session organised by Bharat Chamber of Commerce.

He expects inflation to come down to manageable levels by the year-end. In general, he said, inflation below 7% does not give much discomfort. “The current concern on inflation is overblown,” the chief statistician said.

The wholesale price index-based inflation eased to 9.97% in July from 10.55% in the preceding month. Food inflation dipped 10.35% in the week to August 7, compared with 11.4% in the previous week.

“Global commodity prices are stable now with controlled rise and there is no overheating of the domestic economy,” he said.

Only in the short run, there could be some shortage of supply of consumer and essential goods in tandem with rise in purchasing power as a result of the inclusive growth drive.

Prof Anant has taken a sabbatical from DSE and joined the government as chief statistician and secretary of union ministry of statistics & programme implementation.