We will maintain growth, tame inflation: Chidambaram

March 17th, 2008 - 9:04 pm ICT by admin  

A file-photo of P. Chidambaram

New Delhi, March 17 (IANS) The government will take all possible steps to ensure momentum of high growth is maintained and inflation is kept under check, Finance Minister P. Chidambaram said Monday. “We will make every effort to maintain growth rate at well over 8 percent and close to 9 percent,” Chidambaram told parliament, amid worries of slowdown that resulted in the second-steepest fall in a key share market index.

Participating in a lively debate on the national budget, the finance minister also said there was pressure on both the government and the Reserve Bank of India (RBI) to check price rise.

“We will take fiscal steps. We will also urge the Reserve Bank to take monetary steps,” he said.

“The RBI’s dharma is to maintain price stability,” the finance minister said adding he would also focus on growth while taming inflation.

“I am confident that it (RBI) will keep in mind the need to stimulate growth and ensure that growth remains high and sustained,” he said. “There is tremendous pressure on the government to fight inflation,”

India registered an economic growth of 9.6 percent in the last fiscal but this has slipped during this fiscal, notably on account of a lower expansion in both industrial and services sectors.

Even on the issue of prices, inflation has begun to creep up and is hovering at around a nine-month high and well above the five percent mark - which is the threshold set by the central bank.

Chidambaram said crude oil and demand mismatch in food articles apart, the prices of other commodities like lead, aluminium, nickel, iron and steel had also increased and were adding to the inflationary pressures.

Later, the upper house passed the vote on account as well as the supplementary demands for grants to allow the government to meet its expenses till the budget is passed by parliament. Lok Sabha had approved the same Friday.

During the course of the debate, Chidambram also denied opposition’s allegations that the ambitious $15 billion loan waiver (Rs.600 billion) scheme for some 40 million farmers was mere propaganda and dared the opposition to face elections on that count.

“Prejudice is really deep-seated in certain hearts and minds,” he said.

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