Inflation projected at 5.3 pc for this fiscal
Worries over inflation, which had recently crossed the six per cent mark, seem to be receding with the think tank NCAER projecting a 5.3 per cent price rise in 2007-08.
By PTI |
NEW DELHI: Worries over inflation, which had recently crossed the six per cent mark, seem to be receding with the think tank NCAER projecting a 5.3 per cent price rise in 2007-08.
"On price front, there is an expectation that the commodity price rise will be smaller in 2007 as compared to the high rates of increase seen in the last two years," the National Council of Applied Economic Research (NCAER) said in its quarterly review of the economy.
Despite the inflation based on the Wholesale Price Index breaching the six per cent level in February and March, the average growth in prices was 5.3 per cent in 2006-07. The projections for the average inflation are the same for the current financial year.
While the "supply shocks" had triggered the price rise, the actual cereals stock (both rice and wheat) of 17.4 million tonnes with the government agencies in March was higher than the buffer stock norm of 16.2 million tonnes for March-end, NCAER said.
"On price front, there is an expectation that the commodity price rise will be smaller in 2007 as compared to the high rates of increase seen in the last two years," the National Council of Applied Economic Research (NCAER) said in its quarterly review of the economy.
Despite the inflation based on the Wholesale Price Index breaching the six per cent level in February and March, the average growth in prices was 5.3 per cent in 2006-07. The projections for the average inflation are the same for the current financial year.
While the "supply shocks" had triggered the price rise, the actual cereals stock (both rice and wheat) of 17.4 million tonnes with the government agencies in March was higher than the buffer stock norm of 16.2 million tonnes for March-end, NCAER said.
Last year the stock of wheat had touched a low of two million tonnes in April as against the norm of four million tonnes. "Therefore, a relatively higher stock of 5.4 million tonnes at the end of March-should be a sign of comfort," it said.
It said, while worries about inflation are justified, the policy response should not inflict a higher burden on the farmers.
"The profitability of the agricultural sector could be dampened by this step. It will unnecessarily lengthen the sector's recovery process from stagnation," it said.
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