Retail prices will fall soon, says Virmani

Chief economic adviser to the finance ministry Arvind Virmani on Wednesday said the retail price-based inflation, which is ruling above the wholesale price index, will come down with a lag but would not fall as much as the rate of rise in wholesale prices is falling.

"I expect consumer price index also to come down with a lag but I don't think it will go down to a level we see in the WPI," Virmani said.

He said that he does not expect wholesale price index (WPI) in March 2010 to be lower than March this year. "We have been saying that industrial growth is weak and inflation is coming down. That has certain implications for the policy, which the Reserve Bank of India will take account for," Virmani added.

Inflation fell to over three-decade low at 0.44 per cent for the week ended March 7, while the CPI is still hovering between 9-10 per cent.

On economic growth this fiscal, he said any change from the expected economic growth at 7.1 per cent will depend on the agriculture growth.

"It (economic growth this fiscal) has to be adjusted for agriculture. To the extent that agriculture is lower than 2.6 per cent, which is a normal range, to that extent growth (economic growth) will be lower."

"That is for the central statistical organisation to tell us what will be the agriculture growth," he added.