Inflation to exceed 9% by March: Pronab Sen

Inflation to exceed 9% by March: Pronab Sen
Financial Express, January 21, 2010, Page 2

Press Trust of India, New Delhi

The government on Thursday said inflation could exceed 9% by March end with the impact of crop failure becoming visible by the close of the fiscal.

“Unless something dramatic happens on agri prices, it (inflation) would probably be over 9%,” said Pronab Sen, chief Statistician of India and secretary, ministry of statistics and programme Implementation. Wholesale price-based inflation, which dipped to sub-zero levels following the impact of the global crisis, has started firming up and rose to 7.3%in December, 2009.

When asked whether easy money policy was also fueling inflation, Sen said, “I don’t think that is really the case. There is large undisbursed balance with the banks. However, it could become a problem going forward.”

On the steps that RBI could take in its forthcoming monetary policy review on January 29 to tame inflation, Sen said, the central bank has to take many other factors while changing the key policy rates and ratios.