Inflation will dip to 7 per cent by May: Rangarajan

C Rangarajan, chairman of the prime minister's economic advisory council, on Monday said he expected inflation to drop to around 7 per cent by May, as the food price inflation is coming down.

"I think the inflation numbers will show some decline in the month of March, but certainly by April or May we should see figures closer to 7 per cent.

The weekly data that are available indicate that the food price inflation is coming down," Rangarajan told reporters on the sidelines of a function in Chennai.
 
But he added, ''Since food price inflation is persistent for a long time it has also extended to the manufacturing side - that is why the overall inflation is not coming down as fast we expected."

Food inflation fell to a four-month low of 9.18 per cent for the week ended 26 March. Inflation based on the wholesale price index was at 8.31 per cent in February this year.

"I hope food price inflation would further come down as the wheat crop is reported to be very good. And when this crop comes into the market, foodgrain prices should fall,'' he said.

On the Index of Industrial Production – which figures released on Monday showed to have dipped in February - he said there could be a change in next fiscal.