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Montek admits Plan Panel went wrong on inflation projection
Planning Commission Deputy Chairman Montek Singh Ahluwalia on Sunday conceded that he went wrong while projecting moderation in inflation which remains near the double-digit mark.
"It is true that we were hoping that this (moderation in inflation) will happen earlier, to that extent our credibility becomes a question," he told Karan Thapar in a interview for CNN-IBN's TV programme 'Devil's Advocate' when asked why Government's repeated projections on inflation proved false.
"You should recognise that short-term forecast is subject to error," he said. He, however, asserted inflation would moderate to 7-7.5 per cent by March, 2012.
Headline inflation has remained over nine per cent for several months and was 9.73 per cent in October. The food inflation stood at 10.63 per cent for the week ended November 5.
Inflation has remained stubbornly high despite repeated assurances by several Government functionaries that it would moderate.
Responding to criticism of India Inc that there was a policy paralysis in the Government, Ahluwalia said, "Industry has been a lot more focused on decisions that are holding up infrastructure projects, and not the (financial) reforms".
The Government, he said, "is keen to push (reforms) ahead but needs to develop political consensus and if the measures like GST, DTC and other reforms are delayed, that does not mean that they wound not happen."
On opening up the multi-brand retail sector for foreigninvestment, Ahluwalia expressed the hope that the government would take a decision by the end of next month.
"I am hopeful", he said, when asked whether the Government would be able to take a decision on allowing foreign direct investment (FDI) in multi-brand retail. The decision to allow FDI in retail has been pending for long.
As regards the economic growth, Ahluwalia said it would moderate in the backdrop of sluggishness being witnessed in the developed world.
The growth, he added, could moderate to 7-7.5 per cent during the current fiscal, as compared to 8.5 per cent in 2010-11.
"I think that it (growth) will range between 7-7.5 per cent. We have to do something about it. It is difficult to know when the turnaround will come," he said.
