Inflation will return to single digits this fiscal: Ahluwalia By G Sudhakar Nair

New York, Sept 24 (PTI) The government has said inflation
will return to single digits by the end of the current fiscal
and asserted it was not in favour of taking excessive harsh
measures to rein in the problem as it will have a harmful
impact on the economy.

Talking to reporters accompanying Prime Minister Manmohan
Singh on his U.S. visit, the deputy chairperson of the
Planning Commission Montek Singh Ahluwalia said the trend of
constant rising inflation in India was disappearing.

Maintaining that the financial meltdown in the U.S. has
not had a direct impact on India, Ahluwalia said the country
had an ample stock of foreign exchange reserves to deal with
the temporary meltdown in financial markets.

"The direct impact has been negligible," he said.

He also said that the financial turmoil is not likely to
settle quickly and may only end by next year.

"A turnaround in financial markets cannot be expected by
the 2009 end," he said.

From India's point of view, however, it will be foolish
to think that it will not face any economic uncertainties in
the future if the turmoil in the financial markets continue,
Ahluwalia said.

On the sensitive issue of land acquisition in states for
setting up industries, Ahluwalia said state government must
create a credible mechanism for purchase of land by
industrialists.

The process of compensating landowners should be done in
a fair and transparent manner and there should not be any
exploitation, he said.

On energy security, Ahluwalia said restrictions for India
in the high technology sector will have to be lifted.

The financial turmoil in the U.S. showed that India's
liberalisation strategy stood vindicated, he said, adding,
that excessive financial innovations led to vulnerability of
the financial markets.

Any innovation cannot go beyond regulation, Ahluwalia
said. PTI GSN