Inflation may ease by December: Rangarajan

Former RBI Governor C Rangarajan today said the inflation, which rose to 3.58 per cent in October, may ease by December and remain below the 4 per cent level by the end of the current fiscal.
Rangarajan said he thinks this is the end of the season when prices rise as far as food articles are concerned.
There will be a seasonal decline in food prices by next month, he said.
"Therefore, I believe now that the monsoon has also been good, the food prices may come down rather than rise further," the former central bank chief told PTI.
He was speaking on the sidelines of a lecture by Rathin Roy, director of the National Institute of Public Finance and Policy, organised by the ICFAI Foundation for Higher Education here.

"It (the inflation) could be close to 4 per cent limit is what we are talking about. It should be 4 per cent or slightly below that (by FY18-end)," Rangarajan said.

Wholesale inflation rose to a seven-month high in October as prices of food articles, led by onion and vegetables, witnessed a sharp rise.
Rangarajan, however, refused to answer whether the RBI would consider the inflation rate while undertaking the policy review next month.
Earlier, in his address, he said the governments role as a producer of marketable goods is diminishing.
The government's role as a regulator is very important, given the prevailing market conditions to ensure the system and structure remain competitive, he said.

"The role of the government as a producer of public goods and services has definitely increased. Whether we accept it or not there is an increasing demand on the government to provide what they call public goods, which are broadly defined as primary education and primary health and so forth."
Rangarajan emphasised the need for prudence in fiscal spending and pointed out that most of the government funds, in the name of public expenditure, were spent towards the revenue expenditure instead of capital expenditure.
This, according to him, was not a wise move, as it led to larger fiscal deficit with proportionally lesser public good.

Roy, who was a member of the N K Singh Committee on the new Fiscal Responsibility and Budget Management (FRBM) law, stressed on the need for fiscal prudence.