Inflation may not drop till March: Rangarajan

There may not be any further significant fall in inflation this fiscal, Chairman of Economic Advisory Council to the Prime Minister C Rangarajan said here today.

He said inflation remained above 9% for eight consecutive months from April to Nov 2011 with the break coming in December 2011 when it fell to 7.5% and further to 6.5% in January this year.

Inflation in food articles eased from 10.7% in April 2011 to -0.52% in January, while non-food manufacturing inflation even in January this year remained high at 6.7%, he said.

Speaking on 'dynamics of inflation' at the 48th annual conference of Indian Econometric Society at Pondicherry University, Rangarajan said the significant decline in headline inflation has been primarily due to strong decrease in food articles, particularly of vegetables.

He said there might not be any further significant decline in inflation till March and rationalisation in pricing of petroleum products is still to be completed, which may impact prices as and when a decision is taken.

Supply side constraints had to be necessarily eased to continue growth along with price stability, he said but added that interventions to do so take some time to mature.

"In our case at least as far as foodgrains are concerned use of the official stocks in an imaginative manner can help keep foodgrains price under control", Rangarajan, a former RBI Governor said.