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Inflation May Fall To 6% By March – Says Pranab Da

Looks like inflation is slowly and gradually on the decrease. Headline inflation fell to 7.47% from 9.11% in December, 2011 as measured by Wholesale Price Index (WPI). It is expected that these values will still fall to 6-7% by the end of this fiscal year, March 2012.

Though food inflation declined to 3.36% by the end of December, the overall inflation on manufactured products, fuel and non-food primary items still remains high. Prices of manufactured products, increased by 7.41% in December compared to the previous month which was 7.70%. These account for 65% in the WPI inflation.

Inflation has kept the "Aam Junta" on its toes

Inflation has kept the "Aam Junta" on its toes

RBI has already increased the interest rates 13 times since March 2010 to overcome the effect of inflation. With the coming sustained period of sub-7% growth, RBI is likely to cut these rates and is also expected to decrease the Cash Reserve Ratio (CRR) by March. India’s GDP growth rate reached to 6.9% in the second quarter this fiscal year. However the industrial production fell by 5.1% in October.

Source: This & This, Image

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