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Inflation to moderate, fall to more acceptable levels: FinMin

Inflation, currently near 10 per cent, is likely to moderate to more acceptable levels on good rabi crop and better rainfall prediction, Finance Secretary Ashok Chawla said today.

business Updated: May 10, 2010 23:04 IST

Inflation, currently near 10 per cent, is likely to moderate to more acceptable levels on good rabi crop and better rainfall prediction, Finance Secretary Ashok Chawla said today.

He, however, said inflation is spreading to non-food products from food items, which ruled over 16 per cent despite some moderation.

"We are hopeful that with the rabi (winter) crop coming in ... with the prospect of good monsoon which has been predicted by the Met department, inflation is starting to moderate, will moderate further and will come down to reasonably more acceptable levels," Chawla told reporters on the sidelines of an Assocham function in New Delhi.

Chawla said that the price rise is spreading to non-food items for some time now and that the government has taken a number of administrative and policy steps to rein in the negative impact on inflation.

"Inflation has for sometime been spreading to non-food items," he said.

Though Chawla acknowledged that the money expected to come through the 3G spectrum auction looks very impressive, he said that this would not have any impact on the government's borrowing plans at this point of time.

"The money which is coming in through the 3G auction is certainly very impressive and that indicates the fact that it was totally transparent, competitive process ... As for what impact it will have on borrowing, we have already put out the calendar. I don't expect much change in that at this point in time," he said.

On Day 23 of the 3G spectrum auction, the government's revenue crossed the Rs 45,000-crore mark, even as the pan-India bid for radio waves rose to Rs 11,327 crore.