mumbai: : Prime Minister’s Economic Advisory Council (EAC) chairman C Rangarajan on Saturday said that inflation may slide to 6 per cent in three months. “Inflation has reached uncomfortable levels and several actions have been taken on the monetary and fiscal sides. I think in the next three months it (inflation) could come down to 6 per cent,” Rangarajan told reporters on the sidelines of an SME conference here today. The wholesale price index-based inflation rose to a 42-month high of 7.57 per cent for the week ended April 19.

Rangarajan said that while the impact of the fiscal and monetary measures taken to contain inflation would take some time to show results, a good procurement and reasonably good Monsoon expectation, too, would contribute to easing inflation.

He said the base effect on the food price index has also caused the exaggerated inflation figure. Commenting on the impact of the global economic downturn on India, he said that despite the slump, the country’s economy is expected to grow at 8-8.5 per cent. However, disturbances in domestic and international markets may have a slight effect on growth. “I think the economy will grow at 8-8.5 per cent. In fact, the EAC estimated growth at 8.5 per cent three to four months back... I think it is achievable,” he said.

Earlier, he said that bank credit flows to small and medium enterprises (SMEs) are still inadequate and asked banks to enhance credit disbursals to SMEs, besides launching state-level venture capital funds for small-scale units.