Government will tame inflation: Chidambaram

Bangalore, June 23: Asserting that the United Progressive Alliance Government will tame the galloping inflation, Union Finance Minister P Chidambaram today said the spurt is due to the high growth the country has been witnessing over the last three years.

Speaking at the valedictory of the centenary celebrations of the nationalised Canara Bank here, he said increase in the prices of sugar, wheat and pulses had led to the increase in inflation, which had touched a 12-month-high of 5.24 per cent during the week, ending June ten.

Mr Chidambaram asserted that the Government, headed by Dr Manmohan Singh, ''will not spare any step to tame inflation''. The Prime Minister too was concerned with the situation. No developing country was spared of inflationary trends due to spurt in growth, he said.

Recalling the Indian experience, he said that in 1998-99, the inflation had touched seven per cent for some months and again between October 2000 and February 2001, it was over seven per cent and in March 2001 it had crossed eight per cent. The Government had then taken steps to bring down the inflation, he pointed out.

Mr Chidambaram said the country had witnessed a growth rate of a little over eight per cent and it was the Government's responsibility to maintain the high growth. Referring to financial inclusion to cover those uncovered by the banking sector, he said the obligation lay with the banks to identify sections of the society that had been marginalised and reach out to help them. They could be farmers, self help groups or small and medium enterprises.

On agricultural credit, he said the Government was confident of crossing the target of Rs 1,75,000 crore by the end of the current fiscal. Similarly, he was also confident that credit to small and medium enterprises would double in five years. ''We have ensured a 20 per cent growth in the first year and we will do it in the next four years,'' he added.

Mr Chidambaram said the banks should also strictly implement policy guidelines of the Government with reference to these sectors.

They should also discharge their corporate social responsibility, benefitting all stakeholders.

Stating that banks had a long way to ensure that credit provided formed 75 per cent of the Gross Domestic Product, as in developed countries, he said currently credit contributed to 35 per cent of the GDP.

Commenting on credit offtake, Mr Chidambaram said that during the last 16 months, credit deployment in the banking system had been over 30 per cent and this had been accelerating the economic growth.

Lauding the Canara Bank for the steps it had taken to emerge as the number one in the country with regard to total banking operations, he said he would like to see it emerge a major global player in a few years. India should have a few big sized world class banks, he added.

UNI