Chidambaram says inflation will be moderated

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New Delhi May 3

The Finance Minister, Mr P. Chidambaram, today expressed confidence that the current inflation rate, which is hovering over 6 per cent since January 2007, would be moderated due to "a combination of supply side, fiscal and monetary measures taken by the Government and the Reserve Bank of India."

Winding up the debate on the Finance Bill 2007 in the Lok Sabha, Mr Chidambaram said that there has been a rise in inflation with wholesale price index crossing 6 per cent and inflation of the primary articles ruling at 12.3 per cent.

Recounting the steps initiated by the Government, he said on the fiscal side, the Government had reduced import duty on edible oil, raw materials and also excise duty on important mass consumption goods.

On the monetary front, the central bank had increased the cash reserve ratio (CRR) in six steps from 5 per cent to 6.5 per cent, besides increasing risk-weights on several sectors including housing, commercial real estate and capital market and non-banking finance companies. He said the RBI had taken a number of steps to moderate credit growth.

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