Food prices to ease; economy to do better than 6.3 pc: Monte

Planning Commission Deputy Chairman Montek Singh Ahluwalia on Thursday said food prices would ease during the coming months and economy would grow more than 6.3 per cent, as estimated earlier by the Plan panel.

"Our GDP outlook of 6.3 per cent had possible upsides and downsides. Now the downsides are being removed. We feel that we could do a little better than 6.3 per cent," Ahluwalia told reporters in New Delhi.

Admitting that high food prices are a matter of concern, he said, "as long as we end the year with 5 per cent inflation ... that's a comfortable level. With the improved perception of the prospects for Rabi (winter crop), you will see food price inflation moderating in the course of the year."

As per the current estimates, he said, farm production would not be as bad as anticipated earlier in the year by the government.

"Our national assessment is that the agricultural output is going to be less affected by the drought than we thought was the case six weeks ago," he said, adding floods in Andhra Pradesh and Karnataka are quite localised and are unlikely to make a difference to the national forecast.

Earlier, the Plan panel predicted a fall of 2.5 per cent in agricultural output, which was later revised to just 1 per cent fall after considering the fact that there was enough ground water where the drought was most serious.