Inflation seems to be coming down from high levels which would give the Reserve Bank some room to reduce policy rates, an official of investment bank Morgan Stanley said on Tuesday.
"... I think inflation in India seems to be coming off the boil and that gives some leeway for the RBI to act. But I find, RBI is not the main player out here, the whole issue is that inflation is symptomatic of a wider problem in India," Ruchir Sharma, the Managing Director & Head of Emerging Markets and Global Macro, Morgan Stanley Investment Management, told reporters here.
Addressing media on the sidelines of an event, he said inflation is being pushed up because of funding of welfare schemes by the government as well as rising supporting prices of agricultural produces.
"... The fact that some of the welfare schemes have been pushing inflation up in India. The support prices for agricultural products have been increasing too rapidly."
The wholesale price index-based inflation was at 6.62 per cent in January, against 7.18 per cent in December. The rate of price rise was 7.24 per cent in the same month a year ago.