PM promises more steps as India’s inflation up again (Roundup)

April 25th, 2008 - 5:33 pm ICT by admin  

A file-photo of Manmohan Singh

New Delhi, April 25 (IANS) Amid reassurances by Prime Minister Manmohan Singh to curb price rise and a caution against “scare-mongering”, India’s annual rate of inflation rose to 7.33 percent for the week ended April 12. The inflation rate, as measured by movements in the weekly official wholesale price index, had eased a bit to 7.14 percent for the week ended April 5 from a 40-month high of 7.41 percent for the week before.

During the week under review, prices of some commodities like cereals, lentils, vegetables and edible oils eased a bit, while minerals like iron ore became dearer.

Significantly, the final data released for the week ended Feb 16 showed that the annual inflation rate was sharply higher at 5.66 percent, against 4.89 percent reported earlier based on provisional statistics.

Ahead of the release of inflation data, leaders of Left parties met with Prime Minister Manmohan Singh and asked him to take immediate measures to check rising food prices, including a ban on futures trading in some 25 commodities.

They also asked the prime minister to reduce import duty on crude oil, saying high prices of the commodity that is hovering around $110 per barrel in global markets was already resulting in higher revenues for the government.

“The prime minister has assured the delegation that the government is taking all necessary steps to deal with the problem. There is no need to indulge in scare-mongering,” said Sanjaya Baru, media advisor to Manmohan Singh.

“The prime minister urged all political parties to eschew the temptation of politicising the misery of people and warned against creating an environment of scarcity which would only encourage speculators and hoarders,” Baru added.

His remarks, particularly on the neglect of the farm sector since 1996, did not go down well with the opposition Bharatiya Janata Pary (BJP), which led the coalition governments for the bulk of the period between 1996 and 2004.

“He himself is politicising the whole issue,” said senior BJP leader Yashwant Sinha, reacting to the prime minister’s remarks. His party has been protesting across the country what it terms as government inaction in curbing prices.

Earlier, Finance Minister P. Chidambaram said in a written reply in the Rajya Sabha that administrative measures were under the government’s active consideration to curb price rise but warned that such steps could retard economic growth.

“Though the measures to contain inflation may result in some moderation in the economic growth, it is the endeavour of the government to sustain the current momentum of high growth with price stability,” he said.

He also told the Lok Sabha later that the recent price rise was due to hardening of commodity prices internationally. “Steps taken will take some time to have an impact on inflation. Every possible measure is being taken. We must be patient.”

Apart from the measures taken by the government like a ban on export of rice and edible oils and duty cuts on imports, the Reserve Bank of India (RBI) has also taken some steps ahead of its new monetary policy to be unveiled April 29.

Last week, it announced an increase of 50 basis points in the cash reserve ratio (CRR) for banks to be implemented in two phases of 25 basis points each on April 26 and May 10. More monetary steps by the central bank are expected April 29.

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