Finance Minister Pranab Mukherjee today said that retail price inflation would come down rapidly in the coming months and hoped that the country would exceed the growth projected by the International Monetary Fund.
"I expect inflation based on Consumer Price Index - Industrial Workers (CPI-IW) to decline rapidly as the price of the food items is now declining," he said addressing a meeting of industry chamber CII.
Average inflation based on CPI-IW for the months of February and March 2010 has been about 14.6 per cent, he said, adding that retail price based inflation is higher mainly because food items make up most of the index basket.
Food inflation, based on wholesale prices, had scaled 20 per cent in December, but has since declined to around 16 per cent now due to arrival of fresh crops in the market.
The government has taken a host of initiatives to deal with rising prices, Mukherjee said, adding, "Inflation erodes real income. It hurts the marginalised and the poor segment of our society the most."
As regards economic growth, Mukherjee said, "IMF in its latest World Economic Outlook has projected India's GDP growth to be 8.8 per cent in 2010, and 8.4 per cent in 2011 and I expect an even better performance."
The economy was estimated to record a growth rate of 7.2 per cent during 2009-10 despite the impact of unfavourable monsoon on the farm sector, he added.
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India's economic growth slipped from over nine per cent in the three years till 2007-08 to 6.7 per cent during 2008-09 due to the impact of the global financial crisis.
The economy, as per the Planning Commission estimates is expected to record a growth rate of 8.5 per cent during the current fiscal.