India's Chief Statistician T C A Anant today said concerns over inflation, which is close to double digits, are overblown and it would dip to manageable levels by the year-end.
Trying to allay apprehensions over the price rise, Anant said, "Much of the current concern in the country about inflation is overblown. I think that by the end of the year, inflation will be manageable." He was addressing members of the Bharat Chamber of Commerce here.
Anant said that with budget deficit under control and a fertiliser subsidy policy in place, there would be a dampening effect on inflation.
Although food inflation declined by over a percentage point to 10.35 per cent during the week ended August 7, analysts say the fall may not prompt the Reserve Bank of India (RBI) to reverse its tight money policy stance at the next review on September 16.
The RBI has been raising its lending and borrowing rates this year to curtail consumer spending and in the process control the price rise.
Meanwhile, the overall inflation that includes the prices of manufactured goods besides food items, fell to single digit at 9.97 per cent in July, after a gap of five months.
The inflation was at 10.55 per cent in June, while for May it was revised upwards to 11.14 per cent from the provisional number of 10.16 per cent. Inflation entered the double digits in February when it climbed to 10.06 per cent, as per the final figures.
Buoyed by the decline, Finance Minister Pranab Mukherjee had expressed the hope earlier this week that the drop in prices would continue, while Planning Commission Deputy Chairman Montek Singh Ahluwalia had said inflation would reach 6 per cent by December.
Ahluwalia had said that although July inflation at 9.97 per cent was "still too high... I am glad that it is down below the double digit range... It will go to 6 per cent by December".
Inflation has become a political sensitive issue with the Opposition raising in within and outside Parliament. Led by NDA, the opposition parties organised an all India strike on July 5 to protest against rising inflation and the hike in prices of petroleum products.
