New Delhi, Apr 4 Wholesale price index (WPI) inflation is likely to decline to 7 per cent by end-March, 2011, as per the data yet to be released, on the back of a good rabi crop this year, well-known economist and Planning Commission Member Mr Abhijit Sen said on Monday.

He said the latest inflation figures, to be released soon, could show that food inflation - which was 9.5 per cent on March 19 - has also come down to 8 per cent year-on-year for the last week of the 2010-11 fiscal, as the country is set to harvest a record wheat production.

“Inflation should come down to 7 per cent for March-end, while food inflation should come down by 1.5 per cent from the current level, helped by good rabi (winter) crops,” Sen told reporters on the sidelines of an event organised by Yes Bank and The Hindu Business Line here.

He suggested a cautious approach while allowing the export of wheat and non-basmati rice. Mr Sen said overseas shipments of these grains should be permitted with export duty in the wake of high global food prices.

“Export duty is necessary because global grain prices are very high. If unrestricted exports are allowed, domestic prices will go up, putting pressure on food inflation,” he added.

Further exports should be left to the private traders and the government should stay away from it. “The government should not directly get involved in exports. Earlier, it committed mistakes,” he said.

Inflationary pressures remain an area of concern for the Indian economy. Headline inflation for February was 8.31 per cent. Mr Sen said while fruits and vegetables production is set to rise in the coming years, inadequate processing facilities would continue to keep pressure on prices. “Much of investment in processing of fruits is simply not there...,” he said.

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