Headline inflation to fall further in February, says Montek

Written by: Pti
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New Delhi, Feb 14 (PTI) Encouraged by moderation ininflation in January, the Planning Commission today forecastcontinuation of the trend in the coming month due to declinein the cost of onion and other vegetables.

"I am absolutely clear that in February the inflationwill come down further," Planning Commission Deputy ChairmanMontek Singh Ahluwalia told reporters here.

The headline inflation or Wholesale Price Index (WPI)declined marginally to 8.23 per cent in January from 8.43 percent in the previous month as per the date releases today.

Explaining the reason for spike in headline inflation inJanuary, Ahluwalia explained, "In January, for three weeksbasically prices of onions and vegetables were high."

He said, "The prices of primary articles were highbecause of the impact of onions and vegetables. These thingshave very small weight but the shooting up of price of theseproducts was quite excessive."

According to Ahluwalia, the headline inflation wouldcome down primarily because of easing of vegetable prices. Hepointed out that the prices of onions in February havecrashed.

On low industrial growth in past months he said, "I doagree that for two months it has been low. We need to watchif there is recovery or not. Certainly if it doesn''t happen weneed to look at what is that is holding up the manufacturing(sector) production."

In his view, in the medium term during 12th Plan period(2012-17), the country should be aiming for better than doubledigit growth of manufacturing sector.

About the volatility in industrial growth numbers, hesaid, "IIP (Index of Industrial Production) number tend tovary from month to month."

Allaying fears that this trend could hurt the country''sgrowth story, he said, "Whatever we have seen is consistentwith the growth (8.5 per cent) that we set for the currentyear 2010-11)."

He said, "I do agree that growth rate of the industry andgrowth rate of manufacturing with in industry are veryimportant indicators."

"Future growth does depends on very strong growth inmanufacturing and if for any reason it is felt that it is nothappening, we should look at what the constraints are," headded.

The industrial growth slowed down to 1.6 per cent in themonth of December compared to 3.6 per cent in November.

However, during the April-December period this fiscal theindustrial growth was 8.6 per cent compared to 8 per centduring the same period in 2009-10.

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