Economist and Planning Commission Member Abhijit Sen
Wholesale price index (WPI)
inflation is likely to decline to 7 per cent for the end-March, 2011, period, on the back of a good rabi crop this year, well-known economist and Planning Commission Member 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 in New Delhi.
He suggested a cautious approach while allowing the export of wheat and non-basmati rice. 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 said.
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. In this backdrop, the Reserve Bank has followed a tight monetary policy.
Export of wheat has been banned since early 2007 and non-basmati rice since 2008.
The country is set to harvest record wheat production of 81.47 million tonnes this year. Rice production is estimated at 94.01 million tonnes. As of January, the government had foodgrains stocks of 47.2 million tonnes, as against the buffer norm of 25 million tonnes.
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