FM asks industry to hold price line

NEW DELHI: Finance Minister P Chidambaram on Tuesday asked the industry to hold the price line, failing which government may take administrative measures to control the soaring inflation, hovering above seven per cent mark now.

"If it (fiscal and monetary measures) is not enough... and if the industry does not change its behaviour, certainly we will improve administrative measures," the minister said addressing the Annual function of CII.

However, he said the government feels that fiscal and monetary measures to control inflation are sufficient at present.

Among the monetary measures to control prices, the Reserve Bank today announced a hike of mandatory cash deposits of banks--CRR--by 25 basis to 8.25 per cent. It has already announced 50 basis point increase in CRR on April 17. These measures would suck out over Rs 26,000 crore from the system.

Among fiscal measures, Chidambaram today cut customs duty and imposed export duty on steel, besides tax cuts on other items, to rein in their prices.

Administrative measures mean direct action by the government to check hoarding and shortages. Implementation of some of such measures, like imposing stock limits on sellers, lie in the hands of state governments.