New Delhi: Â Inflation in India is being driven by supply side constraints but will come down to lower than 8 percent by this fiscal end, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia said Thursday.
“By the end of the year, you will have inflation at lower than 8 percent. There is an expectation that inflation rate would begin to soften in December,” Ahluwalia said at the economic editors conference here.
“You could argue that government has said that before, I have also said it before. But frankly there have been very unusual developments internationally, which have led to this problem,” he added.
Annual inflation based on the wholesale price index was recorded at 9.72 percent in September.
Latest data showed food inflation soaring past double digits. For the week ended Oct 8, food inflation was registered at 10.6 percent, rising from the 9.32 percent in the previous week.
Ahluwalia said supply side constraints were the primary reason for the rise in inflation.
“What you see recently is inflation not necessarily because of pressures on the demand side, although there may have been some,” said the deputy chairman.
“Our objective in the 12th plan is to push for supply side capabilities which will generate 9 percent (GDP) growth. If we succeed in that we are not going to generate more inflation as long as we are adding to the supply side.”