PM meeting policymakers on tackling inflation
Prime Minister Manmohan Singh is holding a meeting of top policymakers on Saturday, seeking ways to curb inflation which has been hovering close to double-digits for almost 9 months in spite of successive rate hikes by the central bank.
Latest official data showed India's annual inflation based on wholesale prices at 9.72 per cent for September, strengthening the likelihood of another rate hike by the Reserve Bank. The annual inflation was registered at 9.78 percent in August.
September is the 10th straight month when inflation has been over 9 percent, putting pressure on the central bank to hike interest rates.
The provisional figures for July too were revised upwards to 9.36 percent compared to 9.22 percent reported previously.
The meeting is being attended by Planning Commission deputy chairman Montek Singh Ahluwalia, Prime Minister's Economic Advisory Council (PMEAC) chairman C. Rangarajan and chief economic advisor to the finance ministry Kaushik Basu.
"The meeting is on the current economic situation. We will have a discussion on growth and inflation, and consider the policy options in this regard," Rangarajan said.
Although the RBI has indicated many times in the past that it would continue to adopt a hawkish stance until inflation eases, poor industrial output numbers for July and August will make the central bank hesitant in hiking rates by a significant quantum.
In its last review Sep 16, the central bank had raised the rep rate by 25 basis points. The RBI has hiked its policy rates 12 times since January 2010 in its war against inflation.
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