FinMin: Good rabi can stem inflation

The finance ministry sounds confident of bringing inflation within manageable limits if the rabi crop is good and global commodity rates stabilise.

"If the rabi crop is good and international commodity prices stabilise, we should be able to manage inflation this financial year within manageable limits," Finance Secretary D Subbarao said.

Referring to rising commodity prices, he said no country, including India, was completely decoupled from the global happenings. "Generally, a recession in the US is accompanied by a fall in commodity prices, but this has not happened so far." However, if there is further downturn in the US, or recession, it should have a moderating impact on commodity prices, he said.

In the backdrop of soaring inflation, the finance ministry is also preparing itself for a moderation in economic growth in 2008-09 compared with the projected 8.7 per cent for 2007-08. "Growth is moderate but it will be in keeping with high growth trajectory. It will be 8 per cent-plus. At present, controlling inflation is our priority, if there is moderation in growth, then so be it," Subbarao said.