Food inflation to moderate by mid-Nov: Montek
The Plan panel today expressed concern over high milk and fruit prices but exuded confidence that food inflation, which has shot past 16 per cent in mid-September, would moderate by the second half of November.
"It (food inflation) is little high. The high rate of food inflation is mainly on account of milk and fruits. If you see cereals, the inflation rate is coming down. The inflation rate of milk is a matter of concern," Planning Commission Deputy Chairman Montek Singh Ahulwalia told reporters here.
He however added: "I am still hopeful that the base effect (the period with which the figures are compared) would show up in form, of much more moderate inflation not until November. You will see food inflation going down significantly by mid or second half of November."
Food inflation climbed 0.98 percentage points to 16.44 per cent during the week ended September 18, from 15.46 per cent in the previous week.
Among food items, milk prices soared by 24.32 per cent during the week, compared to the same period last year, while fruit rates rose by 15.13 per cent.
About core sector growth, which slowed down to 3.7 per cent in August, Ahluwalia said, "We don't track data on monthly basis. We will touch double digit (industrial) growth this fiscal. In order to reach 8.5 per cent economic growth, it is not actually necessary that industrial should be in double-digit by the end the year.
"Even if the industrial growth is 9 per cent and services growth is somewhere between 8 to 9 per cent, we will end up with that kind (8.5 per cent) of GDP growth."
India's economic growth slowed down to 6.7 per cent during 2008-09 from 9 per cent in the previous three fiscal years due to the impact of global financial crisis. After the government provided stimulus, the growth accelerated to 7.4 per cent last fiscal.
The government expects the economy to grow by 8.5 per cent this fiscal. For the first quarter of this fiscal, the economy expanded by 8.8 per cent.