Chidambaram hints at banning exports to curb inflation

April 22nd, 2008 - 10:49 pm ICT by admin  

A file-photo of P. Chidambaram

New York, April 22 (IANS) The Indian government is prepared to ban exports in more industries to control inflation, Finance Minister P. Chidambaram has said while conceding that the nation’s growth rate could slow this fiscal year. Expressing worry over soaring prices of rice and other basic food items, Chidambaram told The Wall Street Journal Tuesday that the government has already cut some exports and taken action to reduce food prices, such as banning the export of rice other than basmati and increasing the minimum export price of basmati rice.

Further bans were being considered, he said while acknowledging that such moves go against the principles of free trade.

The ministries of steel and commerce have proposed some export bans in the steel sector, he pointed out.

Inflationary expectation is driving prices, and the mismatch of supply and demand is another culprit, Chidambaram said. The Monopolies and Restrictive Trade Practices Commission, the country’s anti-trust regulator, has begun inquiries in the rubber, cement and steel sectors.

Chidambaram also expressed concern over the divergence between India’s growth rate and that of China, which recently reported first-quarter GDP growth of 10.6 percent. For India, an 8-9 percent rise in GDP is “welcome and acceptable”.

But India remains one of the most attractive markets for any investor, the finance minister maintained.

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