Control Of Inflation

Control of inflation has been a priority for the United Progressive Alliance government and the steps taken so far would enable the country to return to a regime of moderate inflation in eight to 10 weeks, Prime Minister Manmohan Singh said here on May 22.

Releasing the UPA''s Report to the People, 2004-2008 here, Dr. Singh said the government had made determined efforts to accelerate the pace of development while maintaining price stability. Pointing out that sharp escalation in global oil prices, the price of steel and the price of food crops had impacted the domestic economy, he reiterated the measures taken by the government to meet the challenge and added that a normal monsoon and "public recognition" of the government''s determination to reverse the spurt in inflation should help alter the expectations.

Govt Likely To Additional Steps To Curb Inflation

The government is expected to take additional fiscal as well as monetary measures if prices do not soften in coming weeks, said Planning Commission Deputy Chairman Montek Singh Ahluwalia on May 6.

However, Ahluwalia cautioned against taking administrative measures. Ahluwalia said the country is likely to record a growth of 8 per cent during the current fiscal. According to the RBI annual credit policy, Indian economy would grow between 8-8.5 per cent during the current year. During 2007-08, the economy expanded by 8.7 per cent. Inflation touched a 42-month high of 7.57 per cent for the week ended April 19.

Govt Mulls Further Export Ban To Curb Inflation

Hinting at hard measures like further ban on exports to control rising prices, Finance Minister P Chidambaram has said inflation is also being stoked by cartel like behaviour in some sectors of Indian economy. Listing out a number of steps, including exports ban on non-basmati rice taken by the government, he told the Wall Street Journal in an interview that the government would consider further bans. Noting that soaring prices of rice and other basic food items are a matter of worry, Chindambaram said inflation is also being stoked by a mismatch of supply and demand and by cartel-like behaviour in some sectors of the economy.

The daily said that Indian government has cut some exports and taken actions to reduce food prices, such as banning the exports of non-basmati rice and hiking the export price of basmati variety. "As a short-term measure we will consider such bans, too," Chidambaram was quoted as saying. The minister told the daily that ministries of Steel and Commerce have proposed some export bans in steel, but further ban on food exports are less likely since "all export of food items is virtually banned" already.