PMEAC eco review tomorrow, inflation target to be upped

The Prime Minister's advisory panel is all set revise tomorrow its estimate of inflation by this fiscal-end.

Inflation has already breached the Prime Minister's Economic Advisory Council's (PMEAC) earlier projection of merely over six per cent and food prices are not showing any signs of easing.

The rate of price rise at 8.56 per cent in January has also crossed the the Reserve Bank's revised estimate of 8.5 per cent by March.

Food inflation, according to data released today, rose closer to 18 per cent for the first week of February.

The PMEAC will come out with Economic Review for 2009-10 tomorrow and is also likely to up its growth projection for the economy to over 7.2 per cent for the current fiscal from its earlier estimate of 6.75 per cent.

Earlier, PMEAC Chairman C Rangarajan had said that 16-year high industrial growth in December at 16.8 per cent indicates that there is an "upward bias" to the Central Statistical Organisation estimate of 7.2 per cent growth rate for the current fiscal.

PMEAC will come out with its Review of the Economy 2009-10 just a week ahead of the Budget presentation when the suspense over withdrawal of stimulus will be over.

As such, its views on stimulus withdrawal will be quite important, since there are conflicting positions on the issue.