New Delhi, April 29 (IANS) Asserting that government measures to curtail price rise will “bear fruit in weeks to come”, Prime Minister Manmohan Singh Tuesday called for “sobriety in corporate lifestyle” to deal with inflation. “A measure of sobriety in corporate lifestyles and compensation can also help cut costs and maintain the price level. This is what I meant by the tightening of belts. It helps your firms, it helps the consumer,” Singh said at the annual session of Confederation of Indian Industry (CII) here Tuesday.

The prime minister admitted that inflation was the country’s “immediate challenge” that had consequences for growth, income distribution and the industry’s competitiveness, and called for “a commitment to sustained growth of productivity and innovation” as “an integral part of the philosophy of corporate managements”.

The United Progressive Alliance (UPA) government has been under persistent attack from opposition parties ever since inflation showed an upward trend a year ago. It was recorded at 7.33 percent for the week ended April 12 against 7.14 percent for the previous week.

“Industry and trade must eschew the temptation of seeking short-term gains, and should cooperate with the government to ensure long-term stability of the growth process,” the prime minister said.

“While the government has the primary responsibility for sound macro economic management, the leaders of industry, particularly in sectors characterised by significant market power in the hands of few producers, have a societal obligation to assist the government in moderating inflationary expectations.”

Manmohan Singh in his speech sounded optimistic about checking inflation with “a normal monsoon” but made it explicit to the industry leaders that they also owed a lot to the nation in checking price rise.

While exuding confidence that his government would be able to moderate the price rise, Singh said that the government could not ignore “the fact that there are external factors contributing to inflation over which we do not have much control”.

Singh also took on the world community for not doing enough to meet the challenge of price rise, and underlined the need for “a new global compact between the developed and the developing countries, between the land surplus and labour surplus economies, between food exporters and food importers, to stabilise global food prices.”

“The diversion of land from food crops to biofuel, an increasing use of available food grains and vegetable oils for the production of biofuels have greatly contributed to a rise in food prices…The world awaits a new concordant between the developed and developing nations on food security,” Singh said.

The prime minister’s remarks came against the backdrop of US Secretary of State Condoleezza Rice’s remark Monday that an improvement in the diets of Indian and Chinese people was the main reason for skyrocketing prices of grain worldwide.

“While biofuels continue to be an extremely important piece of the alternative energy picture, obviously, we want to make sure that it’s not having an adverse effect,” she told a conference of Peace Corps 2008 in Washington.

Singh claimed that the prospects for domestic growth were good, and price stability would sustain the growth process.

He urged the industry and trade players to “absorb, to the extent possible, the rise in input costs by laying emphasis on improved productivity and thereby help maintain the price line”.

Referring to the global financial system, Singh said that the management of the financial sector in developed economies, especially the US, had been less than satisfactory.

“The sub-prime crisis and the recession in the US have consequences for the stability and substantiality of global growth. The international community has been slow to come to grips with the now visible structural weaknesses in the functioning of the international financial system,” he said.