Inflation to remain at 6-7 per cent till March: Basu
28 Dec 2010
The country's headline inflation was expected to remain between 6 per cent and 7 per cent till the end of this financial year, the government's chief economic advisor Kaushik Basu said in Chandigarh today.
In this, he seemed to take a more pessimistic view than C Rangarajan, chairman of the prime minister's economic advisory council, who had said yesterday that he expected inflation to be down to 5.5 per cent by March next year.
''Inflation is still a concern. The earlier expectation that it would go below 6 per cent by March looks unlikely. International liquidity is very high. That could affect us. But, if inflation is around 6.5 per cent, it will still be manageable,'' he said on the sidelines of a meeting of the Merchants' Chamber of Commerce here today.
Besides, the ongoing currency war between the US and China was putting inflationary pressure on India, he added.
''When China and the US get into currency war, the excess money goes to other countries. This is putting pressure on India. The additional money supply is bouncing and coming to India,'' he said.
In recent months, several Asian countries have tightened their capital control policies due to liquidity inflows and the resultant inflationary pressure.
