Prices will be moderated: FM

New Delhi, Feb 15 (UNI) Finance Minister P Chidambaram today expressed confidence that the creeping inflation rate would be moderated and did not oppose the idea of cutting duties on petrol to bring this about.

Mr Chidambaram's confidence in being able to combat inflationary pressures emnated from the success of the UPA government in bringing down the price level from eight per cent when it assumed the reigns of the government.

The Finance Minister told reporters here that rising prices of pulses, milk and vegetables were hitting the common man and said this was not a result of mere seasonal factors.

The government had earlier reduced retail prices of petrol by 4.5 per cent and diesel by 3.2 per cent. Inflation reached more than a two-year high of 6.73 per cent during early February, sending panic signals among economic actors like stock market players and investors. This unusual rise in prices also compelled the Reserve Bank of India to take drastic measures like hiking CRR rate and repo rate and the government to ban export of certain sensitive items, like wheat, as well as effect imports to augment supplies.

"What is worrisome is prices of pulses, milk and vegetables is not seasonal alone. This is more than seasonal, which is causing present disturbance in price situation. It is affecting the common citizen," Mr Chidambaram said.

When asked if the Finance Ministry would cut duties on petroleum products, Mr Chidambaram said Petroleum Minister Murli Deora has indicated that the burden of price cut will be shared by the oil companies and the government.

In reply to a question, Mr Chidambaram did not disagree that a price cut in petrol and diesel would help lower prices.

The Finance Minister said when the UPA government came to power, inflation rate was more than eight per cent, but the government brought the price rise under check. He said as a result of the fiscal and monetary steps the government was taking the price rise would be moderated.

UNI