The prevailing over 12 per cent food inflation and the recent hike in prices of petrol and diesel had generated quite a political storm that is expected to hit the monsoon session of Parliament beginning on Monday.
"We expect to see the rate of inflation in wholesale prices to come down to around 6 per cent by December", he said here while addressing the National Development Council (NDC), the highest policy making body comprising Chief Ministers and the Planning Commission.
Singh regretted that states were not paying due attention to farm sector -- crucial to curbing inflation.
"This must be corrected if we want to achieve a broad based improvement in living standards in rural areas. Better agriculture performance is crucial for food security and would help in tackling the problem of inflation... present high rate of inflation is mainly due to food price inflation," he said.
However, Chief Ministers of BJP-ruled states said that it was the Centre that had failed in tackling inflation and that rising prices was making life difficult for the common man.
"Inflation poses a great threat to the country's development. In fact, there is a real danger that inflation, if not effectively tackled, could derail the entire growth process...," Gujarat Chief Minister Narendra Modi warned.
"There is a need to understand the constant agony that millions of people are forced to undergo daily," he said.
Singh, however, hoped that with normal monsoon expected, food prices would ease in the second half of the year.
Monsoon accounts for around 80 per cent of rains India receives and nearly 60 per cent of the cultivated land is rain fed. Two years of poor rains led to an upward spiral in food prices, the effect of which spread to manufactured goods.
Singh also sought support of the Chief Ministers for implementation of the Goods and Services Tax (GST) tax regime considered as the biggest tax reform that would combine central and states taxes.
"I would urge Chief Ministers to give full support to the effort to implement GST from April 1, 2011", he said.
The GST would replace excise and service tax at the central level and VAT at the state-level. The Centre has proposed a three rate structure -- 20 per cent for goods, 16 per cent for services and 12 per cent for essential items.
On growth, Singh said though the economy would expand by 8.1 per cent annually during the Eleventh Plan period (2007- 12), it would still be the highest-ever achieved any Plan.
The NDC was called to approve the Mid-Term Appraisal of the Eleventh Plan, which listed power and infrastructure as areas of concern to attaining 9 to 10 per cent economic growth.