Govt will take further steps to curb inflation: FM

New Delhi, June 23 (UNI) Reacting to the hike in the wholesale price index, Finance Minister P Chidambaram today said the government would not be found wanting in taking further steps to contain inflation, but was hopeful that the slew of monetary and fiscal measures taken by the government so far would moderate inflationary expectations.

"The government would take further steps if necessary to contain inflation. Monetary measures have been taken. Some fiscal steps have been taken and some action has been taken on the import side", Mr Chidambaram told newspersons here.

"I am confident that these steps will moderate inflation. If necessary we will take further steps", Mr Chidambaram said adding that "inflation is always a matter of deep concern for any government".

Official data released here this morning showed that the hike in prices of food articles resulted in the point-to-point inflation rate crossing the five per cent mark, touching a 12 month high for the week ended June 10.

The annual inflation based on the Wholesale Price Index (WPI) stood at 5.24 per cent, as against 4.72 per cent during the previous week.

The Finance Minister said the soaring of prices was due to the pass- through of fuel prices.

"When our government assumed office, inflation was creeping upwards. But we decided to moderate inflation and we did so", he said.

"During 2004-05 and 2005-06 inflation was moderate and ranged between 4 per cent to 4.5 per cent . There has been some upward movement of prices since March 2006", Mr Chidambaram noted.

To maintain a price watch, The Cabinet Committee on Prices allowed yesterday duty free wheat imports by private trade and halted export of pulses with immediate effect. It also announced other measures to augment supplies.

The Reserve Bank recently hiked repo rate and reverse repo rate by 25 basis points to curb inflationary expectations.

Asked whether a rise in bond yields would put pressure on interest rates, Mr Chidambaram observed that it was necessary not to go by a week's spurt.

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