Inflation to slow down to 5.5% by March 2011: O P Bhatt

India's inflation rate would slow down to between 5.5 per cent and 6.5 per cent by March 2011, State Bank of India (SBI) chairman O P Bhatt said here today. Technically, inflation should come down, said Bhatt, citing strong economic growths, backed by improving performances by all economic sectors.

India's current inflation rates hovers around 1O per cent. Bhatt was speaking to Singapore banking and financial community, giving an update on the Indian economy and SBI plans at the Luncheon hosted by his bank.

He expressed confidence of stronger Indian economic growths in the coming years, driven by will-power and determination of the young Indian population, the consumer spending and infrastructure investments.

Bhatt also said that the rural economic expansion was already taking place, with wide ranging micro-financing schemes, supporting revenue generating avenues and enterprises for the villagers. As such, SBI was expanding its rural network through mobile-banking and cell-phone links, said Bhatt.

Having already spread well across India, SBI is well positioned to extend its services to the rural areas, he said. Bhatt sees the role of rural economy as important as the other sectors, including infrastructure development, services and manufacturing industries.

He expects emerging Indian markets of middle-income population to double to 800 million over the next five to eight years from the current estimated 300-350 million.

This middle-income population would create another strong demand for higher quality goods and lifestyle, all of which would be met by young Indian entrepreneurs that are already in the making, he stressed.

To match with such new demand, SBI has been adding 1,000 branches and setting up 10,000 Automated Teller Machines every year, he said.

Bhatt also showcased in Singapore SBI-SG Global Securities Services, a SBI joint venture with Societe Generale of France to market financial trade packages, depositories and equity futures in India.