The wholesale price index (WPI)-based inflation rate is likely to moderate to reasonable levels by September-October this calender year on the back of possible good monsoons along with sound macroeconomic management, Montek Singh Ahluwalia, deputy chairman of Planning Commission, said here.
“Food inflation at this point is very high. However, there is no domestic shortage of cereals. We hope inflation to fall to reasonable levels by September-October,” Ahulwalia said on the sidelines of the regional consultation for drafting the approach paper to the 12th Plan (2012-2017) here. He, however, said the government missed the earlier projections of inflation on the back of external factors like the rise in crude oil prices among others.
Referring to the targeted growth rate in the next plan, he said the country would enter the next plan on the back of higher growth achieved in the 11th Plan. “Even if the economy grows 8.5 per cent this fiscal, the average growth rate for the 11th plan will be 8.2 per cent, which is higher than the 7.6 per cent seen in the 10th Plan. We are aiming at a growth rate of 9 per cent to 9.5 per cent in the 12th
Plan, which will require strong policy action from the government,” he said.
Meanwhile, the four southern states have asked for more flexibility in central schemes in the initial consultation with the Planning Commission on Friday. “Central schemes should be made more flexible. If there is too much micro management, then it is a problem,” Ahluwalia said.
The Planning Commission also emphasised the need for improving infrastructure facilities across India. “There are concerns on infrastructure as it will help in sustaining the present growth rate. We have to improve on all fronts — power, coal, road, ports and all major infrastructure projects. We will also have to make an effort to double infrastructure growth rate in the 12th Plan as against what has been achieved in the 11th Plan,” he said.
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He also said, the finance ministry was in consultations with various ministries on the proposed Infrastructure Debt Fund. “We have recommended a $11 billion infrastructure debt fund. Presently, the finance ministry is consulting various other agencies on this and hopefully, something will come out soon,” he said.
India, which is expected to spend $1 trillion in the next five years in infrastructure, is mulling to form an infra debt fund to support public-private partnership projects in the country. The debt fund will attract foreign investment through special purpose vehicle route into the various infrastructure projects.
Reacting to IIP numbers for April, he said the new series of IIP has shown good IIP numbers. “As there are structural changes in the economy, new industries should be added to reflect the real industrial growth,” he said.
The index of industrial production for April rose 6.3 per cent over the same period last year after 8.8 per cent gain in March.
April IIP data has been calculated taking 2004-05 as base year instead of earlier 1993-94 figures.