Inflation to ease in 3-4 months: Rangarajan

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New Delhi, May 12:: Inflation is expected to come down to the acceptable level of 5 to 5.5 per cent after four months due to an anticipated good monsoon and measures taken by the government and Reserve Bank, Prime Minister's Economic Advisory Council Chairman C Rangarajan said on Monday.

"Inflation is likely to come down to 6 per cent in the next three to four months. Thereafter it can come down to 5-5.5 per cent depending upon the monsoon and other sectors," he said.

It is not only due to monetary measures announced by the Reserve Bank, but due to other factors as well, he said. Also, it would be due to the base effect, as inflation was rising at a slower rate at this time last year. Despite all assumptions, it would come down, he said.

"Much will depend upon the monsoon, much will depend on the way how the output behaves.. it is possible to go down to 5 to 5.5 per cent. At present, the expectations are that monsoon will be good," he said.

On the impact of fiscal measures taken by the government to curb inflation on tax collections, he said, "There will be, of course, some impact of fiscal measures but I think it could be taken care of."

He also said the high oil crude oil prices, which have crossed 120 dollars a barrel, could slow down the GDP growth though it would not "derail" the growth process.

"I think high oil prices will have its impact (on GDP growth). It could slow down growth," he said.

"In January, the council had projected the GDP growth at 8.5 per cent, but now I would say that it could be between 8 and 8.5 per cent," Rangarajan said.

According to advance estimates of the Central Statistical Organisation, the Indian economy is expected to register 8.9 per cent growth in 2007-08.

Rating agency ICRA has projected the Indian economy to grow at a lower rate of 7.8 per cent this fiscal. Earlier, addressing the conference, he said there was a need to "re-visit" the tax structure on oil products in view of the rising international crude oil prices.

Later, when asked about the need, he said the comment was in view of the "environmental aspect" as the taxes are imposed partly to curb oil consumption.

In 2007-08, crude oil and petroleum product imports, estimated at over USD 90 billion, accounted for 38 per cent of India's total imports.