Nagpur, May 6 (UNI) The procurement of 15 million tonnes of wheat and forecast of a satisfactory monsoon would moderate the inflation level in the next three to four months, Dr C Rangarajan, chairman of the economic advisory council to the Prime minister, said today.
''Inflation is expected to come down from the present record levels of 7.6 per cent to 6 per cent in the next few weeks'', Dr Rangarajan opined.
Addressing the valedictory function of the 60th batch of Indian Revenue Service (IRS) trainees at the National Academy of Direct Taxes (NADT) here, Dr Rangarajan said the measures initiated by the government, including procurement of 15 million tonnes of wheat and the forecast of a satisfactory monsoon, would combine to dampen inflation.
The rise in the rate of inflation in the country had been caused by a combination of domestic and international factors, Dr Rangarajan said. ''Globally, prices are rising because of the drought in Australia and diversion of corn to produce bio-fuel. Oil prices are also going up. In India, there are supply bottlenecks in some commodities. Besides, money supply has been over 20 per cent for the last three years in the country,'' he said.
Later, speaking to newsmen, Dr Rangarajan said the government had initiated monetary and fiscal measures to control inflation, but these would take time to be effective.
In reply to a question, he said it was necessary to go for a reduction in the inflation rate further from 6 per cent.
''Ideally, inflation should be below 4 per cent. Even 5 per cent is acceptable, and right now, it is beyond even this acceptable level,'' he said.
Asked about the statement by United States (US) President George Bush that prices in the international market had risen because the Indian middle class was consuming more food, Dr Rangarajan said these needed to be taken in the right context. ''The demand factor must be taken into consideration. President Bush said that there was a greater demand from the Indian middle class. He did not say that Indians were eating more,'' he added.
N B Singh, Member (Personnel and Vigilance), Central Board of Direct Taxes (CBDT), and P V Bhide, Revenue Secretary in the government of India, also addressed the trainees. The 45 trainees, including one from Bhutan, of the 60th batch of IRS officers, went through 16 months of training at the academy. NADT has been established for training new recruits of the IRS as well as in-service officers.
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