New Delhi, June 5 (UNI) Planning Commission Deputy Chairman Montek Singh Ahluwalia today said the hike in fuel prices would add only 0.5 per cent to inflation rate and was hopeful that the price level would move Southwards in the next four months as a result of the various measures taken by the government.
"Inflation would depend upon the world prices, but it would be lower than the current level four months down", Dr Ahluwalia told newspersons here. He said the direct effect of the petroleum price hike will be about 0.5 per cent.
"But if the other measures we have taken, that start bringing down inflation, I hope it will not go to double digit," he said.
Dr Ahluwalia said that economy would meet the 8 per cent GDP target for fiscal 2008-09, and avowed that the petrol price increase would not be impacted by the increase in prices of petrol, diesel and LPG.
Dr Ahluwalia called upon the public to exerice patience adding that anti-inflationary measures taken by the UPA government would check prices, He said he did not agree with the view that by not increasing the fuel prices, inflation could be checked.
"You might have kept fuel prices a little lower, but by financing this through oil bonds, other liquidity injections would have created a bigger inflation four months down," he said.
He said the move to increase petroleum prices would not derail the GDP growth.
Agriclutral growth rate, which stood at 4.5 per cent during 2007-08, will not be affected by these measures, Dr Ahluwalia said.
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