New Delhi, Mar 4: Finance Minister P Chidambaram today ascribed the rise in price index to demand supply mismatch, which had resulted from production stagnation of wheat, rice and pulses. Replying to a supplementary by Mr Murli Manohar Joshi, BJP, Mr Chidambaram said the present rate of inflation was 4.5 but the government hoped to bring it down to near 4 per cent, for which it would take various measures.
He said worldwide the prices had increased, which was affecting prices in the country too. Besides the money supply in the country had gone up due to investment. ''The government will carefully watch and take monetary measures. We have got to balance price stability with growth,'' he said.
As long as there is supply demand mismatch in food, it would be difficult to bring down prices, he said.
The Finance Minister said the National Food Security Mission and the National Agriculture Mission launched by the government would greatly reduce the demand supply mismatch in the farm sector.
He, however, said the country was largely self-sufficient in foodgrains, but it needed import of oil and pulses.