Inflation to moderate soon, economy to grow at 8% in FY09: Monte

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New Delhi, May 6 (UNI) Planning Commission Deputy Chairman Montek Singh Ahluwalia today said the government can consider some more measures to contain inflation, if prices do not soften.

''We are not at all happy with the rate of inflation. It should come down. The Government can take more measures if needed,'' Mr Ahluwalia said on the sidelines of a conference here.

Inflation has touched a 42-month high of 7.57 per cent for the week ended April 19, as compared to 7.33 per cent in the previous week.

''We should give priority in bringing down inflationary expectations,'' he said.

He added that the government and Finance Minister P Chidambaram have been taking all necessary steps to contain inflation, which is building pressure on the UPA regime.

''The full impact of these measures is yet to be seen. The Government has reduced duties and I am sure there will be further moderation in inflation,'' he said, adding that the ''the government can take more measures if the prices are not contained.'' The economist further said the country is likely to grow at eight per cent during the current fiscal, compared to 8.7 per cent growth witnessed in the previous fiscal.

The RBI annual credit policy also projected the economy to grow between 8-8.5 per cent during FY09.

On banning futures trading of essential commodities to tame inflation, Mr Ahluwalia said the expert committee believes that such trading does not increase inflation.

Asked about the food situation in the country, Mr Ahluwalia said, ''this year will be good year for food.'' He said the National Food Security Mission, the Rs 5,000 crore flagship programme to ensure food security for all by 2012, is carrying out its role pretty well.

''You can see the results. The wheat production and procurement has been good and the same is expected for kharif,'' Mr Ahluwalia said.


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