The Hindu Business Line : ‘Be patient, inflation will moderate over a period’

New Delhi, April 25 Even as high inflation continued to be a bugbear for the common man as well as for the ruling UPA-coalition, the Finance Minister, Mr P. Chidambaram, on Friday expressed confidence that inflation would moderate over a period of time on the back of the monetary and fiscal measures initiated in the recent weeks.

“We must be patient. I am confident inflation will moderate over a period of time. I have taken fiscal measures. Monetary measures have also been taken. Administrative measures are under contemplation,” he said in the Lok Sabha on Friday during Question Hour.

His observations about inflation control came on a day when official data released by the Government showed that the wholesale price index (WPI) based inflation had risen to 7.33 per cent for the week ended April 12 from 7.14 per cent a week earlier. Inflation had touched a 40-month high of 7.41 per cent for the week ended March 29.

Stating that the behaviour of some players leaves much to be desired, Mr Chidambaram pointed out that traders in Delhi had, on Wednesday, joined together and conveyed that there should be no searches or action against them. “They have indirect support of some political parties,” he said.

On steel makers, Mr Chidambaram said that the steel manufacturers have heeded to the appeal of the Prime Minister and decided to hold the price line for three to four months.

The anti-inflationary measures include fiscal discipline, rationalisation of duties of essential items, effective supply-demand management of essential commodities through liberal tariff and trade policies.

“Though the measures to contain inflation may result in some moderation in economic growth, it is the endeavour of the Government to sustain the current momentum of high growth with price stability,” Mr Chidambaram said in a written reply to a question on rising inflationary trend in the last few months.

WPI-based inflation remained below 4 per cent from September to December 2007; it increased to 4.5 per cent in January 2008, 4.6 per cent in February 2008 and reached 6.4 per cent (provisional) in March 2008. Thirty-three commodities with a weight of 25.9 per cent in WPI contributed to 80 per cent of the overall inflation of 7.14 per cent for the week ended April 5, 2008.

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