The Planning Commission today termed the current inflationary situation in the country as a “serious problem” but exuded confidence it will improve by the end of the year.
“Inflation is a serious problem. We need to worry about that... inflation, as of now, cannot be said to be under control,” the Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, told reporters on the sidelines of a CII event.
His comments came a day after food inflation entered the double-digit zone after a gap of over five months.
Meanwhile, headline inflation, which also factors in manufactured items and fuel products, has been above the per cent mark since December 2010.
Mr Ahluwalia, however, said high inflation is a global phenomenon.
“Everywhere in the world inflation is higher...,” he said.
Asked about his views on the likely trajectory of inflation in India, he said: “I am not predicting but I hope that by the end of the year it will be lower.”
He said the price situation is being constantly monitored.
“That (inflation) is not the Planning Commission’s immediate concern. We look at it in the medium term... I am sure both the RBI and the Finance Ministry are doing what is necessary,” Mr Ahluwalia said.
The Planning Commission Deputy Chairman also said that the country’s economic growth this fiscal would be around 8 per cent, lower than the 8.5 per cent achieved in 2010-11.
“Growth (in 2011-12) will be 8 per cent... It is quite clear that we are cyclically seeing a slowdown compared to last year...,” he said.
He further added: “Growth in India is going to be lower than in the last year but that is also true of the rest of the world. If India grows at 8 per cent in the current year, it will be the second fastest of any country in the world“.
Mr Ahluwalia has in recent days maintained that economic growth this fiscal will not be more than 8 per cent, lower than government’s projection of around 8.5 per cent.