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More measures to check inflation: Chidambaram

NEW DELHI: Even as the rate of inflation inched up to 7.61 per cent for the week ended April 26 from 7.57 per cent the previous week, Finance Minister P. Chidambaram on Friday viewed the upward movement as “stable and not statistically significant” while holding out an assurance that more administrative steps would be taken to tame the price spiral.

Commenting on the inflation data here at the end of an official briefing on Cabinet decisions, Mr. Chidambaram said the movement [of inflation from 7.57 per cent to 7.61 per cent] “in our assessment means that it is stable and not statistically significant.

The government was now “persuading” the cement industry to roll back prices. “More administrative steps will be taken as and when they become necessary to check inflation,” he said.

As of now, the government has taken a slew of administrative measures to hold the price line. These include extension of the ban on futures trading — already imposed on wheat, rice, tur and urad last year — to four more commodities, namely gram (chana), soya oil, potato and rubber, while primary steel producers have been persuaded to go in for a voluntary cut in prices.

Evidently, the government has more such administrative steps in the pipeline. “We are in the process of persuading cement companies to roll back prices. If that succeeds, that will also be an administrative step … We are as concerned as everyone else. That’s why we are taking steps. Every week there is a rollout of some steps or the other. If necessary more steps will be taken,” Mr. Chidambaram said.

When pointed out that the Forward Markets Commission (FMC) had not taken kindly to the extension of futures trading ban on four additional items, Mr. Chidambaram said: “The FMC is an independent regulator. We are a democracy. The FMC is entitled to express its views. The government has taken the decision after careful consideration.”

As to when the initiatives taken by the government in tandem with the Reserve Bank of India were likely to ease the inflationary pressure, he said: “When the steps come together and take effect, there will be moderation [in inflation]. That’s what the Prime Minister suggested in Bangalore. One must have faith that these steps will yield results.”

“Steps are taken with the intention and expectations that they will bear fruit. Text book economists tell us that this will bear fruit … In fact, it has come as a big relief that it [inflation] is more or less stable at 7.6 per cent,” the Finance Minister said.

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