Amid price rise worries, PMEAC Chairman C Rangarajan today said all available policy measures should be put in place to bring down inflation to the comfort zone of below 5%.
"We must use all of our policy instruments to bring down the current inflation and re-anchor inflation expectations to the 4 to 5% comfort zone," the chairman of Prime Minister's Economic Advisory Council (PMEAC) said here.
Inflation based on the Wholesale Price Index (WPI) has shown some moderation in the recent months, but it was still high at 8.66% in April.
The Reserve Bank has been following a tight monetary policy since March 2010, while the Government has taken several fiscal measures like banning exports of wheat, sugar and non-basmati rice to rein in prices.
The Government has also set up an inter-ministerial panel headed by Chief Economic Advisor Kaushik Basu to suggest ways to control inflation.
With India's GDP expanding at 8.5%, Rangarajan said high growth does not warrant a higher level of inflation.
"We must remain committed to maintaining inflation at a low level," he said.
He said even as the last few months have seen a decline in foodgrain and vegetable prices, it is expected that inflation will come down in the coming months though it may remain at high level for some time.
"Hopefully, we can see inflation rate coming down to the range of 6-0 to 6.5% by March 2012," he said.
Finance Minister Pranab Mukherjee exuded confidence that the rate of price rise would moderate further in the days ahead.
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