With his government under attack over high prices, Prime Minister Manmohan Singh today said inflation would come down to 5-6 per cent by December and projected an 8.5 per cent economic growth for this fiscal.
"Price continues to be a matter of deep concern. The government attaches highest priority to containing inflation so that there is no distress to the common man", he said in his first press conference to mark the completion of one year of the UPA-II government.
The Centre, he said, would closely monitor the situation and "together with the state governments, take all corrective steps to bring down prices and protect the vulnerable sections of society".
He exuded confidence that with the measures being taken "we can bring inflation down to 5 to 6 per cent by December."
While food price inflation is ruling around 17 per cent now, the general price index had crossed the 10 per cent level in February. The government had relaxed import of essential commodities and imposed ban on export of rice, wheat and pulses, besides restricting sugar exports to check prices.
Singh said that international situation, especially high petroleum prices, coupled with drought and floods at home had fuelled prices.
The UPA-II last month survived cut motions brought against it in Parliament by opposition parties against certain budget proposals that led to hike in prices of fuels and fertilisers.
Attaching high priority to raising investment in social and economic infrastructure and also agriculture, he said despite the pressure, the economy was expected to grow by 8.5 per cent in this financial year, up from 7.2 per cent and 6.7 per cent in the previous two years.
"This is widely regarded as one of the best performances among the larger economies in the world...Our medium target is to achieve a growth rate of 10 per cent per annum. I am convinced that given our savings and investment rate this is an achievable target," he added.
India's savings and investment rate is nearly 35 per cent of GDP, second only to China's healthy 49 per cent.
To achieve double-digit economic growth, Singh said, fresh impetus would have to be given to manufacturing, agriculture and social and economic infrastructure.
Singh, who is recognised as a world-renowned economist, said that India did not allow global financial crisis to "interrupt" the inclusive growth.
"I leave it to you to judge how well we have done on this count", said.
On the issue of reservation of jobs in the private sector, Singh said, "We need to create an atmosphere so that trade and industry participants help us on this issue. We are working hard towards that and we acknowledge it needs to be taken forward fast."