NEW DELHI, Aug 7 (Reuters): India's headline inflation rate, which is ruling at a 13-year high just below 12 per cent, is expected to fall to below double-digits by the end of the fiscal year, a top government official said Thursday.
Montek Singh Ahluwalia, deputy chairman of India's Planning Commission, which charts out five-year growth strategies, also said the softening of global crude oil prices was a "welcome development".
The government will release inflation data for the 12 months to July 26 at around 6:00 pm local time and a poll forecasts a reading of 12.02 per cent, marginally higher than the previous week's 11.98 per cent.
Meanwhile, the PM's economic advisory council said India's economic growth could moderate to 7.5-8 per cent this fiscal and saw no change in RBI's tight monetary stance till inflation cools down.
"There are certain factors, both domestic and external, which may add to the slowdown of the growth rate, but we still think that the growth rate could be 7.5 to 8 per cent," PMAC chairman C Rangarajan said on the sidelines of Economic Times' India Financial Inclusion Summit 2008. The panel would release its economic outlook in a week's time.
The country had registered 9.1 per cent GDP growth in 2007-08, but a host of measures, including by RBI, to contain inflation may have taken a toll on economic expansion.
Rangarajan said until there is a significant change in the price situation the current stance of RBI would continue. "If there is moderation in the price, I am quite sure that monetary policy stance would change."
The policy action was intended to slow down the credit growth and squeeze money supply. Rangarajan said that unless there is a change in price situation, monetary policy stance would continue.
