Re appreciation: Nothing to worry, says finmin

`Nothing suggests upward pressure on rupee would continue'.

Chief Economic Advisor in the finance ministry Ashok K Lahiri also sought to dispel fears over the rising inflation. He said the average inflation for the year-ended March 2004 would be reined below 5 per cent.

"I will not be surprised if the average inflation for the fiscal is 4.7 per cent," he said. The Reserve Bank of India and the finance ministry had earlier estimated the inflation for the current fiscal to be between 4 per cent and 4.5 per cent, Lahiri told reporters.

The prices of primary commodities world over had hardened. While this would have an impact on inflation levels in India, there was no need to be unduly worried. "It is manageable," he said. Despite the slightly higher inflation, the liquidity conditions were still easy, Lahiri added.

The finance ministry was also disappointed that there were artificial shortages in steel supply. "I am sure the primary producers will make an effort to contain the situation," Lahiri said, adding that the ministry had expressed its concern at the right quarters. "The market imperfections should be corrected soon," he said.

Expenditure Secretary D Swarup said the fiscal deficit might actually be better than 4.8 per cent of gross domestic product as per the revised estimates for the current fiscal.

The higher than estimated disinvestment receipts and a strong GDP growth definitely helped the Centre in consolidating its fiscal position better. "The sell off receipts are likely to be Rs 750-800 crore more than expected," said Swarup.