Inflation contained despite high public debt: PM
Prime Minister Manmohan Singh on Sunday said inflation, described as the only worrying factor by the Finance Ministry, has been contained.
By PTI |
NEW DELHI: Prime Minister Manmohan Singh on Sunday said inflation, described as the only worrying factor by the Finance Ministry, has been contained.
"Despite a high public debt, inflation has been contained," he said after releasing a report on rural infrastructure, prepared by economic think-tank NCAER. The Prime Minister also said," price signals facing our private sector are now well-aligned with international prices."
Earlier this week, Finance Minister P Chidambaram had said in Parliament that inflation is "only fly in the ointment", while the economy was firing on all cylinders.
"Inflation is largely a monetary phenomenon... we are taking steps on monetary and fiscal fronts," he had said, during a discussion on supplementary demands for excess grants for 2004-05 and supplementary demand for grants for 2006-07.
National Institute of Public Fiannce and Policy Director M Govinda Rao said assessment of inflationary situation keeps changing since it is tracked on a weekly basis. Inflation fell to 5.16 per cent during the week ended December 2 from 5.30 per cent and 5.45 per cent in the two previous weeks, he said adding it is under control now.
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Inflation had stood at 4.44 per cent during the corresponding period of last year. Chidambaram had said that in a growing economy, inflation at four per cent is a tolerant figure. "Our aim is to bring inflation below five per cent mark and then move towards four per cent," he had said. The rising inflation had earlier forced the Reserve Bank to announce increase in the cash reserve ratio by 0.25 per cent in two phases, starting from December 23, which would suck out Rs 13,500 crore from the system.
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