Planning Commission Deputy Chairman Montek Singh Ahluwalia today ruled out possibility of inflation hitting double-digits in the near-term, even as the Economic Survey raised concerns about continuing price rise.
"I don't expect double-digit inflation," Ahluwalia told reporters here.
Earlier in the day, the Economic Survey warned that overall prices would go up further in the next few months and partially blamed poor food management policies for the prevailing double-digit food inflation.
"Since December, there have been signs of high food prices, together with a gradual hardening of non-administered fuel products prices, getting transmitted to other non-food items,thus creating some concerns about a higher-than-anticipated generalised inflation over the next few months," the Survey said.
Conforming to the assessment on GDP growth made by the Survey, Ahluwalia said: "That broadly has been our own assessment. The Survey projects a growth rate of around 8.75 per cent for the coming year. We are very encouraged by that. Our own feeling was that growth in the coming year would be well above 8 per cent."
"I don't think that 5.5 per cent (fiscal deficit for 2010-11) should be seen as written and stoned. It is true that we need to have a transition back to some kind of acceptable fiscal deficit but it does not have to be 5.5 per cent. I know that the Finance Commission has said 5.7 per cent," Ahluwalia said.
When asked about introducing coupon system for giving subsidy directly to the beneficiaries in case of petroleum products, Plan panel said that is an issue which has been raised in the 11th Plan (2007-12).
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"I don't think that there is consensus on this. But in my view there is a very strong reason to look at alternatives to the present system where you have unrealistically low prices. Whether you have coupons or cash transfer or something like that," he said.
In the present system products are delivered at prices much cheaper than the market price which greatly encourages misuse and leakage and that encouragement is with the person who has been given the distribution rights, he pointed out.
"If you give a coupon or cash, the benefit is directly going to the consumer. Some states have said to us that they would prefer to shift to cash subsidy," Ahluwalia added.
On the borrowing, he said: "If GDP is higher there is little more room for higher government borrowings."