Ahluwalia also said that economy is on the way to achieve 8 per cent target, and this would not be affected by increase in prices of petrol, diesel and LPG from today.
"It (inflation) would depend on the world prices, but it would be lower than the current level four months down... The direct effect of what has just been done (petroleum price hike) will probably be about 0.5 per cent. But if the other measures we have taken, that start bringing down inflation, I hope it will not go to double digit," he told reporters here.
He said the anti-inflationary measures that the government has taken will certainly bring inflation under control. "I believe it (inflation) would be lower than the current level. It certainly would be lower than what it could have been otherwise. Only thing is we will have to be patient."
Ahluwalia said he does not agree with the view that by not increasing the fuel prices, inflation could be controlled. "You might have kept fuel prices a little lower, but by financing this through oil bonds, other liquidity injections would have created a bigger inflation four months down."
He said the move to increase petroleum prices would not derail the GDP growth. "Eight per cent growth is on the target so far. Though it is lower than last year, it is a fantastic growth rate. Eight per cent will not be affected," he said.
Farm sector growth rate, which stood at 4.5 per cent during 2007-08, will not be affected by these measures, Ahluwalia added.
