Inflation may go beyond food items: PM panel -Governance Now

Inflation may go beyond food items: PM panel

Asks RBI to prepare for this eventuality

PTI | February 20, 2010

The Prime Minister's economic advisory panel has warned that inflation could go beyond rising food prices next fiscal and advised the central bank to be prepared for such an eventuality.

In its economic review for 2009-10, the PM's Economic Advisory Panel (PMEAC) projects inflation, which had come down even to negative zone earlier this fiscal, at 8.5 percent by the end of this fiscal. The review also points towards the potential of rising commodities prices globally due to revival in developing countries and unsettled financial conditions.

The RBI projected inflation to be 8.5 percent by March-end and retained its projection on Thursday, even as inflation already breached this level in January touching 8.56 percent.

The PMEAC also expects inflation to slightly come down by February end or March. "It is true that inflation build-up has breached the RBI projection of 8."

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