Inflation

New Delhi: Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Monday that inflation will moderate in three to four months and agriculture will grow at a higher rate than projected. Inflation rate reached the 16-year high of 12.63 per cent for the week ended on August 9.

"It is not important whether inflation touches the 13-per cent mark but the fact that it will start moderating within three to four months," Ahluwalia said on the sidelines of a function to launch the book 'Reforming Indian Agriculture: Towards employment generation and poverty reduction', edited by Sankar Kumar Bhaumik.

"The actual rate of inflation is seven to eight per cent. I have been saying that inflation we are currently witnessing is not going to stay for long. I reiterate that it is a short-term problem," he said. Ahluwalia's optimism is in stark contrast to the concern of the Finance Ministry, which recently said that inflation was a 'matter of concern' and a 'major disappointment'.

"Agriculture will grow at much higher rate than what's being projected," Ahluwalia said in an apparent reference to the assessment of the Prime Minister's Economic Advisory Council that agriculture would grow at two per cent this fiscal.

He also spoke about heavy subsidies and increase of public investment in the farm sector. "In the last three years, things have picked up and four per cent growth in agriculture is visible," Ahluwalia said.

"Three per cent growth in agriculture in the current fiscal is guaranteed. It can even go up to four per cent," said Planning Commission member Abhijit Sen. (IANS)