NEW DELHI, May 8 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 government39;s chief economic adviser, said on Wednesday.

Annual retail inflation rate eased in March to a fivemonth low of 4.85, helped by a drop in fuel prices.

We dont 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 midpoint of the target range.

India39;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 noninflationary 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

Source Reuters