The Plan Panel today said there has been as increase in the inflation rate

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over the last two years and cautioned that rising debt in advanced economies could lead to higher interest rates.

"Inflation has accelerated in the last two years. Current international environment is very uncertain," the Planning Commission said in a presentation to Prime Minister Manmohan Singh at a full Plan Panel meeting here.

Inflation, measured on the basis of Wholesale prices, has neared 9 per cent in March, breaching the 8 per cent projection of the Reserve Bank.

Also food inflation, which accounts for about 15 per cent in the overall inflation basket, is ruling high at 8.74 per cent for the week ended April 9.

"Current international environment is very uncertain. Global pressure on food prices and oil prices and concerns about debt in industrialised countries may lead to higher interest rates," the Plan Panel said.

Advanced economies like Europe, Japan, and North America are suffering from higher costs and lower tax collections following the global economic crisis, which resulted in increase in debt.

It also said that the economic growth in the 11th Plan period (2007-12) was on an average of 8.2 per cent, which is less than the 9 per cent target.

Although the Commission had pegged the economic growth rate at 9 per cent for the 11th Plan, it was scaled down to 8.2 per cent in view of the impact of the global financial meltdown on the Indian economy.

"GDP growth likely to be average 8.2 per cent over 11th Plan; less than 9 per cent target. But remarkable given the global crisis and drought," the Plan Panel said.