Inflation will be around 5.5 % by March 2014: Rangarajan

The Chairman of the Prime Minister's Economic Advisory Council, C. Rangarajan, on Friday said inflation will likely be around 5.5 per cent by March 2014, while current account deficit (CAD) is likely to be a moderate 3.8 per cent of GDP in 2013-14 from 4.8 per cent a year ago.

Releasing the document 'Economic Outlook 2013-14' here, Rangarajan said: "During 2013-14 the good performance in agriculture will have a moderating effect on food inflation, depreciation of the rupee may put some upward pressure. On balance, WPI inflation by end March 2014 will be around 5.5 percent as against the average of 7.4 percent in 2012-13 and 5.7 percent at end March 2013."

He further lowered the growth forecast for the current fiscal to 5.3 per cent from 6.4 per cent projected earlier.

"Economy will grow at 5.3 per cent in 2013-14," Rangarajan said.

Rangarajan further said that controlling CAD remains a main concern for the government.

"For India, the short-term problem is of financing the large CAD, while the medium term issue is to compress CAD to a more sustainable level of around 2.5 percent of GDP and ensure price stability.

"The Rupee at the current level is well corrected. Stability is returning to the foreign exchange market. As capital flows return and as CAD begins to fall, this tendency will strengthen," he added.