Dr M Govinda Rao, member, Economic Advisory Council to the Prime Minister has said that the inflation rate is expected to come down by March next year.

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Participating at a seminar on economic reforms “Challenges and Opportunities for India Inc” on Friday, Rao said that he expects the inflation rate come down by March. However, he added that he was not sure if it will be under control by then.

“To control inflation the supply management is extremely important. Onion is one of those commodities where the issue is going to be very serious, as rainfall has been poor at northern Karnataka and Maharashtra region, where it is grown. So we do need to prepare for this,” he said. In September the inflation rate was 7.81%.

“Generally speaking on the price commodity movements in this country, November to March is the time when the prices actually cool off. It is time for the RBI to reduce the policy rate by 25 basis points. If it is done investment will start picking up,” he added.

On the recent reforms undertaken by the government, he said that medium term reform challenges are formidable and it is important to focus on sustainable policies rather than populist ones.

On the occasion Shekar Viswanathan, deputy managing director (commercial) Toyota Kirloskar Motors welcomed the government’s decision to clear foreign direct investment in the retail sector. He added that it will not lead to a price spiral or  unemployment as feared by many.

S Visvanathan, group CFO, Aditya Birla Group said that in India at present organised retail segment constitutes only 5%, whereas traditional retailers form the rest 95%.