Inflation stable now, will come down: Chidambaram
New Delhi, May 9: Dismissing as "statistically insignificant" the 0.04 per cent hike in inflation, Finance Minister P Chidambaram today said the prices of essential commodities had begun to come down and this would be reflected in the inflation index after some time. Talking to reporters after the weekly briefing on the decisions of the Cabinet and its Committee on Economic Affairs (CCEA), Mr Chidambaram said the inflation figure released today had come as a ''big relief'' as it showed that the prices had stabilised.
In
fact,
he
had
predicted
that
prices
would
be
stable
for
some
time
before
beginning
the
downward
trend
and
this
had
come
true,
he
pointed
out.
The
change
in
the
second
decimal
(from
7.57
per
cent
to
7.61)
was
not
statistically
significant,
he
said.
Asked
to
explain
the
rise
in
the
inflation
figures,
irrespective
of
the
fact
whether
it
was
significant
or
not,
he
said
the
government
had
warned
about
it
in
the
Budget.
The
government
and
the
RBI
had
taken
steps
with
the
intention
and
expectation
that
these
would
bear
fruit.
''Text
book
economics
says
that
it
will
bear
fruit.''
Besides banning or suspending futures trading in four commodities, the government had persuaded the steel companies to voluntarily reduce prices and a similar move was on with cement manufacturers, he said. "We are in the process of asking cement companies to hold back prices," the Minister said. More administrative steps would be taken if and when they became necessary, he said.
Asked about the criticism of the regulator for the ban on futures trading in four commodities, he said the government had taken the step after careful consideration. However, in a democracy, the regulator was entitled to air its views. Replying to persistent questions, he said nowhere in the world inflation had begun moderating as the crude prices were still climbing and had touched 124 dollars a barrel. Asked about the depreciating rupee against the dollar, Mr Chidambaram wondered why reporters kept complaining over the rise and fall in the value of the rupee.
UNI