Chidambaram: No easy ways to cool inflation

Press Trust of India
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P. Chidambaram
P. Chidambaram

As retail inflation crossed the double-digit mark, Finance Minister P. Chidambaram on Thursday said the Government was looking at various suggestions to cool prices.

“Both the RBI and the Government are trying a number of measures to cool inflation ... We are looking at various suggestions. I am open to any suggestion but I am afraid that there is no easy answer to cool retail inflation,” he said, addressing investors here.

Consumer Price Index inflation, measured by the movement in retail prices of food items, soared to a seven-month high of 10.09 per cent in October. Wholesale price-based inflation shot up to an eight-month high of 7 per cent.

He attributed the rising inflation to the high fiscal deficit incurred by the Government to neutralise the impact of the 2008 global financial crisis.

The Minister added that though the Government had offloaded 500,000 tonnes of wheat to contain prices, this would not cool prices of fruit, vegetables, milk and eggs.

Chidambaram said his priority would be to contain fiscal and current account deficits.

The fiscal deficit would be brought down to 4.8 per cent of GDP in the current financial year from 4.9 per cent in 2012-13, he added.

The Minister said he would endeavour to bring the current account deficit below $56 billion, a figure given by RBI Governor Raghuram Rajan on Wednesday.

(This article was published on November 14, 2013)
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