The Reserve Bank today said inflation, which is hovering near the double-digit mark, will moderate by March-end on the back of better farm output.
"Inflation will come down because the production and agriculture sectors will boost up the rural agro-based economy of the country," Governor D Subbarao said at a RBI Financial Outreach Programme here in central Assam's Morigaon district.
As per the latest RBI forecast, inflation is expected to ease to 7 per cent by the end of March, 2012.
For the month ended October, general inflation stood at 9.73 per cent. Food inflation was 9.61 per cent for the week ended November 12.
On the economic growth, he said the Indian economy was stable and will go on despite global economic meltdown.
According to data released today, India's economic growth rate slipped to 6.9 per cent in the second quarter this fiscal, the lowest in nine quarters, prompting the government to lower its full-year growth projection to 7.3 per cent.
Meanwhile, growth of eight infrastructure industries slowed down to 0.1 per cent in October this year, from 7.2 per cent expansion witnessed in the same month last year.
The Reserve Bank in its mid-year credit policy review last month had lowered the GDP projection to 7.6 per cent for the current fiscal compared to earlier estimate of 8 per cent.
Subbarao said proper coordination of farm loan recovery was the only way out to strengthen the agro-based economy of the country and the North East region, he said.
