Inflation coming under control: PM's aide

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New Delhi, September 19:: India's economic growth is likely to be impacted by the global slowdown and financial market turmoil, but inflation seems to be coming under control after touching a 13-year high in August, two policy advisers said on Friday.

Inflation edged up to 12.14 percent in early September, Government data showed on Thursday, and analysts said price pressures would remain for some more months.

Inflation soared to 12.63 percent in early August as prices of fuel, metals and food items rose. But it started moderating as steps taken by Government and central bank kicked in.

"Coming harvest seems to be reasonably comfortable and consequently, inflation situation may be coming under control," Suresh Tendulkar, chairman of the Prime Minister's economic advisory council told a business conference.

The panel forecast inflation of 8-9 percent by end March 2009, higher than central bank's estimate of 7 percent.

India's gross domestic product grew by 7.9 percent during the April-June period from a year earlier, and the Prime Minister's panel expects it to average 7.7 percent for the full fiscal.

Jahangir Aziz, an economic adviser at the finance ministry, said India's GDP growth could slow in the remaining three quarters as global slowdown and market turbulence weighed.

"If the G-7 (seven major economies) go into protracted deep slowdown, then we will be in the firing line."

India is aiming to sustain high growth rates amid a tight monetary stance and needs to cool prices before the Government heads for general election in 2009.

Tendulkar said the Government may be forced to spend more money in a pre-election year, which analysts say, may lead to higher borrowings.