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.