New Delhi: With inflation turning positive after 13 weeks, the Reserve Bank on Friday said the Wholesale Price Index may rise to six percent by this fiscal end – a development that may pose challenges to the central bank in maintaining a stable monetary policy.
"We have always said by March it should be five percent.
It may become six percent," RBI Deputy Governor KC Chakrabarty told reporters on the sidelines of a seminar on financial inclusion.
He said if procurement prices increase 10 percent every
year food inflation cannot be less than 10 percent.
"This is also partially policy oriented ... We want to
give more money in the hands of farmers," he said.
When asked whether it will be a challenge for RBI to
choose between promoting growth and stemming inflation, he
said the challenge is also there.
The Wholesale Price Index turned positive for the first
time in 13 weeks, rising to 0.12 percent for the week ended
September 5 on inflating prices of essential food items.
Bureau Report
First Published: Friday, September 18, 2009, 11:24