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BW Businessworld

Moderation Of Inflation Will Take...

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Replying to questions in the Lok Sabha, he said financial, monetary and administrative measures have been initiated to check inflation and all possible steps will be taken in future too in this direction.

"Administrative measures are being taken and will be taken," Chidambaram said as members wanted to know what was being done to curb the price rise.

"Inflation will moderate over a period of time... We will take all possible steps. But we have to be patient," he said.

His comments came as inflation witnessed an increase from 7.14 to 7.33 per cent for the week ended April 12. Inflation touched a 40-month high of 7.41 per cent for the week ended March 29 before declining to 7.14 per cent.

Referring to Delhi traders, Chidambaram said, "Behaviour of some players requires much to be desired."

He, however, noted that the steel manufacturers had heeded to Prime Minister Manmohan Singh's advice and decided to hold the price lines for three to four months.

He maintained that inflation was largely driven by international prices.

As some members from Opposition sought to question his reasoning for price rise, Chidambaram took a dig at them, saying "some members do not want to take notice of international reasons but keep their focus on Delhi traders."

The finance minister said 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. On the issue of futures trading, Chidambaram said it has been banned with regard to certain commodities like rice and wheat, tur and urad.

Referring to the Abhijit Sen Committee set up to assess the impact of futures trading on prices, he said after its report is submitted, the government will take a decision on the futures trading on other commodities.

Turning to public distribution system, he said a study had shown that upto 36 per cent of the commodities distributed under it do not reach the intended people.

He said it was the responsibility of state governments to check leakages in the PDS and they should take strong measures in this regard.

Denying that the quantity of foodgrains under PDS had been reduced, the finance minister said an average 300 lakh tonnes of foodgrains are allocated for it annually.

This is in contrast to NDA's tenure, when the maximum allocation touched 239 lakh tonnes.

He, however, said he would support any increased allocation of rice and wheat under the PDS.

(PTI)