Prime Minister''s Economic Advisory Council Chairman C Rangarajan today said that inflation might show signs of coming down in April or May with the food price inflation coming down.
"I think the inflation numbers will show some decline in the month of March but certainly by April or May. Weekly data that are available indicate that the food price inflation is coming down...," Rangarajan told reporters on the sidelines of a function here.
Food inflation fell to a four-month low of 9.18% for the week ended March 26. WPI-based inflation was at 8.31% in February this year. Since foodprice inflation was persistent for a long time, it also extended to manufacturing side and that is why, overall inflation was not coming down as fast as expected, he said.
"I hope food price inflation would further come down as wheat crop is considered to be very good.. and if wheat crop comes into the market, foodgrain prices should fall, he said.
On Index of Industrial Production data, he said there could be a change in next fiscal.
"In February I heard it was 3.6%. We thought it will pick up, but it is showing some improvement now." But if it reaches 8% in a year, then there could be a turnaround in the next fiscal," he said.
Asked about whether there would be a hike in interest rates, he said: "Monetary policy can move from current stance only when the inflation rates show a very strong decline."
On whether there would be any move by the government to deregulate diesel prices, he said the numbers indicated in the budget clearly show that there will be some policy decisions relating to petroleum products during the year.
"However, the timing of the decision will depend on when the inflation rate falls. I think some policy action relating to the petroleum and diesel prices will have to be taken during the course of the year," he said.
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