The government on Tuesday exuded confidence that inflation, which remained high during the course of the year but has started declining, will fall to about 6 % by March end from over 8 % currently.
"Inflation is coming down. Now it is at the single digit but I would like it to be further reduced. I am hoping that by March it would be around 6 %, but it should come down further," Finance Minister Pranab Mukherjee told reporters after tabling the Mid-Year Analysis of the Economy in Parliament.
Pointing out that inflation -- as measured by movement in wholesale prices -- remained high in the current fiscal, the Analysis said, "(it) is now coming down"
Having peaked to 11 % in April 2010, inflation moderated to 8.6 % in October and is expected to decline to 7.5 % in November, Chief Economic Advisor Kaushik Basu, the main author of the Analysis, told reporters.
The deceleration in inflation, according to the Analysis, can be attributed to a slew of policy measures taken by the government and the Reserve Bank "to douse inflationary expectations and pressures."
Rise in inflation in the past one year was mainly on account of domestic drought conditions last year and higher global food prices, the Analysis said, adding, "the average inflation rate for the last 12 months (November 2009 to October 2010) was 8.98% as compared to 2.3 % during the corresponding period last year".
However, it added that the build up in inflation in the current year is 4.34% in October as against 5.93 % in the October 2009.
It said that since the beginning of the current fiscal, double-digit inflation has been observed in non-cereal food items like fruits, eggs, and meat and fish as well as non-food articles like minerals and mineral oils.
As regards food inflation, the Analysis said, it has moderated to 8.05% from a peak of 20.22% in February 2010.