Finance Minister Mr Pranab Mukherjee on Saturday said that inflationary expectations would be in the six to seven per cent range.

“My inflationary expectations will be between six and seven per cent and not below that,” Mr Mukherjee said.

He said that if the inflationary expectations were below that, then it would lead to stagflation and growth would be hampered.

Mr Mukherjee said that inflation had been moderated and would be taken into account during formulation of policy rates.

“I hope the RBI will keep this in view while making policy rates formulation,” he noted.

He said that inflation had been perilously close to double-digit for nearly two years and food inflation was as high as 22 per cent.

“I had to take corrective measures as these high figures were not desirable,” he said.

In February, inflation as measured on the Wholesale Price Index (WPI) rose to 6.95 per cent, against 6.55 per cent in the previous month.

Mr Mukherjee said that the 2012-13 Budget was placed with a view of fiscal consolidation, moderation of inflation and bringing back India to a higher trajectory of sustainable growth.

Regarding improving private sector sentiments, he said that DTC would be introduced next year after examination of recommendations of the Parliamentary Standing Committee.

(This article was published on March 31, 2012)
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