NEW DELHI: India should aim for annual inflation at 5 per cent and try to lower this for economic growth to benefit the broader population, the Planning Commission said in an internal document.
“Price stability is imperative for realising inclusive economic growth,” according to the draft paper, circulated as part of a review of the economy, and obtained by Reuters.
Wholesale price inflation was almost 10 per cent in February, sparking off street protests and last week prompted the central bank to raise interest rates ahead of a scheduled policy review in April.
“In order to achieve price stability, we need to target a headline rate of inflation for both CPI (consumer price inflation) and WPI indices of 5 per cent and then progressively lower. This is quite within the realm of possibilities.”
The document needs final approval by the National Development Council, which is headed by Prime Minister Manmohan Singh.
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