The wholesale price index (WPI) as a measure of inflation might cross the Reserve Bank of India’s (RBI’s) comfort zone by December, while the Index of Industrial Production (IIP) would be in double digits, India’s Chief Statistician Pronab Sen, who is also the secretary of the Ministry of Statistics and Programme Implementation, said today.
However, he added that the tightening of monetary policy was not advisable to bring down inflation, which was largely due to last year’s base effect.
“Both the IIP and inflation numbers are essentially on the base effect of last year. We should be careful but should not overreact and go for contractionary policies. It is better to tolerate a little inflation, so as not to jeopardise growth,” said Sen at an interactive session organised by the Bharat Chamber of Commerce here.
The RBI, which will come out with its second quarterly review of credit policy on October 27, had projected the inflation to rise to 5 per cent by March-end in its first-quarter review.
The annual inflation, as measured by the WPI for the week ended September 26, was at 0.7 per cent.
