Inflation at 6 per cent was a matter of concern in the evolving macro-economic outlook and the Reserve Bank of India fears that consumer prices could be even higher at 7 to 8 per cent.
"Significant feature of recent domestic developments is the firming up of inflation through the year," RBI Deputy Governor Rakesh Mohan said, adding wholesale price index hovering above 6 per cent was ruling above indicative projections.
The deputy governor was speaking at the 9th Global Conference of Actuaries in Mumbai.
The apex bank had forecast that inflation would remain in the range of 5-5.5 per cent in this fiscal and RBI Governor Y V Reddy after the Third Quarter review of credit policy last month had said the central bank would try to bring it down to below five per cent in the medium term.
Wholesale price index hovering above 6 per cent represented a key concern in the evolving macroeconomic outlook, Mohan said, emphasising that in terms of consumer prices it would be even higher in the range of 7 to 8 per cent.
This is for the first time in recent weeks, the apex bank has admitted that consumer prices could be at higher levels of 8 per cent.
Terming inflation as 'tax on the poor' against which there are no hedges available, Mohan said, ensuring price stability was consequently a societal compulsion. Monetary policy as an arm of public policy must be committed to ensure price stability, he added.
This statement assumes significance as it implied that there could be tougher measures, including rate hike in the short term to tame inflation.
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