Inflationary expectation in India to touch global level soon

Mumbai, Jan 11 (UNI) Noted economist and director general of NCAER (National Council of Applied Economic Research), Suman K Bery, has hoped that the inflationary expectation, which was hovering at around five per cent currently, in the country will soon touch the global level of four per cent.

Talking to mediapersons on the sidelines of the unveiling of MasterIndex for the next six months here today, he said that ''Inflationary expectation in the country would be approximately at global level in near future.'' However, he cautioned that ''Everybody in the country was measuring inflation on the basis of WPI (wholesale price index) which was not fair as it covered only 70 per cent of the country's population, keeping apart the service sector.

Commending the role being played by the Finance Ministry and Reserve Bank of India (RBI) in this context, he said that ''Fiscal adjustment was taking shape and the Finance Ministry and the RBI were doing good jobs while curbing the inflation.'' However, he expressed his displeasure over the frequent rise in the interest rates and suggested for its 'softening' without having any formal inflation targets.

Coming on cartelisation of banks, a trend which was being observed in countries like the US and Japan in recent past, he said that ''It can't happen in our country at a time when more than 75 per cent of banking assets were under the possession of the state.'' However, with the advent of private sector banks in a big way, the same can't be ruled out in days to come, he cautioned.

He also predicted that wealth creation was likely to spread from metros to Tier-II cities in future. Commenting on the MasterIndex results for the next six months, which was unveiled by him here today, he said that ''Though Indian houuseholds are likely to remain conservative, but they do need products with volatiolity features attached to them in the form of EMIs.

UNI