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Until February 2, 2007, bank credit, year on year, had grown by 29.6 per cent. Money supply (M3) had expanded by 21.3 per cent. Foreign exchange reserves stood at $180 billion. While these are concomitant features of high growth, it cannot be denied that these monetary trends have put pressure on prices.

Global commodity prices have also exerted pressure on domestic prices. At the same time, supply constraints have emerged in some essential commodities such as wheat, pulses and edible oils. Consequently, average inflation in 2006-07 is estimated at between 5.2 per cent and 5.4 per cent, which is higher than 4.4 per cent last year.

I wish to reiterate Government's concern over inflation. The Government has already taken a number of measures on the fiscal, monetary and supply sides to maintain price stability and, if required, will not hesitate to take more measures. When the UPA Government assumed office in 2004, the inflation graph was on the rise; but we succeeded in moderating inflation and we are confident that we can moderate the present inflationary trend too.

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