FM confident of tackling inflation

MUMBAI: Finance minister P Chidambaram on Saturday expressed confidence that the government would be able to tackle inflation, which is currently at an over two-year high. ���The government is determined to take all steps to moderate the inflation. We have done it before and we are confident that we can do it again,��� he said. He was addressing the annual convention of the Association of NSE Members of India (ANMI).

Mr Chidambaram added that the government was proceeding cautiously in taming inflation as it did not want to affect growth. ���One has to go ahead with great deal of deliberation in moderating these factors and moderating the inflation without affecting the growth,��� he said.

He said that the government is taking the necessary fiscal measures to check inflation, and the RBI too has reiterated its commitment to undertake the steps when it feels necessary. Mr Chidambaran one aspect of inflation to which there were no short terms answers was the supply side.

���In case of some commodities, there are supply constraints. The supply has to be increased. The prices of sugar came down when the supply was increased. The prices of wheat will also moderate when the supply of wheat increases towards the end of this month,��� he said. On stock market related issues, he indicated comprehensive amendments to the Sebi Act to launch investor protection fund (IPF) and that the government will shortly launch a package to enhance financial literacy skills soon.

���We need to advance the level of investor protection and impart financial literary skills at an early stage. We will come up with a financial literacy package, free of cost for schools and colleges,��� Mr Chidambaram said.

���The government is planning to come up with the Investors��� Protection Fund soon and comprehensive amendments in the SEBI Act are under examination,��� he said, adding that investor protection was the surest way to attract small investors to capital market.

���Only 4% of household savings get into the capital market. With IPF, a sizeable portion of household income will enter stock markets,��� he noted. Stressing on the need for consolidation in the broking industry, Mr Chidamabaram said a large number of broking firms raised the cost of regulation and it was in the mutual interest, Sebi, NSE and ANMI to work towards this end.