India sees no 'nasty' upside to inflation, govt adviser says

NEW DELHI (Reuters) -India does not see any nasty upside to inflation at the moment, and expects its economy to expand by more than 7% in the current fiscal year, V. Anantha Nageswaran, the government's chief economic adviser, said on Wednesday.

Annual retail inflation rate eased in March to a five-month low of 4.85%, helped by a drop in fuel prices.

"We don’t see, at the moment, scope for nasty upside surprises (on inflation)," Nageswaran said at an event in the capital, New Delhi.

"There can always be scenarios in geopolitics that can cause inflation to be more than we expect, but at this point the baseline scenario is that inflation gradually converges to the mid-point of the target range."

India's monetary policy committee is mandated to keep inflation within a target range of 2% to 6% and the central bank, the Reserve Bank of India, wants to see it at 4% before cutting rates.

Nageswaran said the Indian economy was better placed than before to pursue "non-inflationary" growth.

He sees economic growth touching 8% in the last fiscal year that ended on March 31, and expects growth of 7% for the current fiscal year, which began on April 1.

(Reporting by Shivangi Acharya; Writing by Sudipto Ganguly; Editing by YP Rajesh and Clarence Fernandez)