Pranab Mukherjee feels inflation will come down to seven percent by year end

New Delhi, Oct 19 (ANI): Expressing concern over high inflation, Union Finance Minister Pranab Mukherjee on Wednesday said that it is expected to come down to seven percent by the year end.

Addressing the Annual Economic Editors' Conference here, Mukherjee said: "The higher inflation is mainly due to the impact of global financial meltdown and certain domestic factors." The arrival of fresh foodgrains in the market will help ease the situation, he said.

Mukherjee said that controlling fiscal deficit is a challenge. It was at 4.7 percent in the last financial year despite global financial crisis and efforts are afoot to put it at the manageable levels.

He said that the agricultural production this year is expected to touch 123.88 million tones which four million tones more than the last year.

Talking about the GDP growth, Mukherjee said due to the global financial crisis our growth rate in 2008-09 had slowed down to 6.8 per cent. However, India was among the earliest nations to recover from the crisis.

Our growth rate rose to 8.0 per cent in 2009-10 and to 8.5 per cent in 2010-11. Unfortunately, dark clouds have gathered in the global skies once again, and these are casting a shadow on us. The Indian economy grew by 7.7 per cent during April-June 2011. Agriculture, industry and services registered growth rates of 3.9, 5.1 and 10 per cent, respectively, in the first quarter," he added.

Stating that he has been disappointed by the growth performance over the last few months, Mukherjee said: " It is evident that India's growth rate in 2011-12 will be less than what we were expecting in February when I presented the Budget.

"In the last few months, a number of factors, both international and domestic, have impacted our economy. The international crude oil prices have continued to remain at or above US $105 per barrel. When we were working on the Budget earlier in the year, the price of crude was roughly between 90 and 95 dollars," he said

"This sharp subsequent rise has placed an unexpected burden on us. Other commodity prices have seen volatile changes, as also the capital flows. The monetary policy tightening and the increase in the interest rates along with the global uncertainty have not helped the industry to go in for fresh investments," he added (ANI)