Govt to make imports easier to control inflation

New Delhi, Feb 15 (UNI) To rein in soaring inflation, the Government is considering liberalising imports and reviewing duties in three sectors to ease supply side pressures, Union Commerce and Industry Minister Kamal Nath said today.

The Government may make imports more flexible "to ease supply side pressures" but denied that there were signs of overheating in the economy, he told newspersons on the sidelines of the launch of the UNIDO Centre for South-South Industrial Cooperation here.

"We believe this is temporary," he said in a reference to rising prices.

The Department of Industrial Policy and Promotion (DIPP) was looking at more gaps and if the need arose, imports could be resorted to, he added.

While some price hike was expected in a fast growing economy like India, it now needed to be checked.

"The prices are rising because supplies have not kept pace with the demand in a fast growing economy. We at Department of Industrial Policy and Promotion (DIPP) are trying to see where these supply gaps are coming from. If need arises imports will be made more flexible," the Minister said.

Inflation figures, released today, showed that prices had scaled a high of 6.73 per cent from 6.58 per cent last week.

As part of efforts to bring down inflationary pressures, a review by the Ministry had revealed that cement, metals and paper were driving inflation in manufactured products. It was planning to increase supplies and reduce duties levied to tide over the shortage of cement and metals in particular.

Industry Secretary Ajay Dua, who heads the Department of Industrial Policy and Promotion, told newspersons that these were short term measures and in the medium to long term it was necessary to "remove supply side constraints".

He said while taxes and duties were short-term steps, in the long run, the input costs would have to be looked at and new production capacity built.

One of the measures to bring down cement prices was to opt for fly-ash and slag instead of limestone. The resulting product was "environmentally-friendly and low-cost".

"We have asked the Finance Ministry to remove the excise duty on this as it is an environment-friendly material," Mr Dua added.

UNI