Inflation should come down to 'no more than 7%': PM

NEW DELHI: Prime Minister Manmohan Singh flaunted 8.5% growth as his biggest achievement, but a reality check came when an editor asked him at the media interaction whether it really meant much for those facing trouble over buying food.

The prime minister, who admitted that high inflation hurts the poor, promptly shifted the blame on factors outside the government's control, one of them being spiralling crude prices. "We face a situation where global prices are going up," he said.

Mr Singh, who maintained that his government was sensitive to the issue, said that care was being taken to address the issue. "We have put in a social safety net that was not there six years ago," he said noting that Mahatma Gandhi National Rural Employment Scheme ( MGNREGA) guaranteed each labourer a daily wage of Rs 100, which is adjusted to the consumer price index.

Besides, he added, grain prices under the public distribution system (PDS) had not been hiked for the last eight years. The twin efforts, he said, were the government's way of insulating the poor from the "ill-effects of food inflation."

Exuding confidence that inflation rate should come down to "no more than 7%" by the end of the current fiscal, the prime minister said the government's effort has been to rein in high prices without hurting growth.

"We want to deal it (inflation) in a manner that the growth rhythm is not disturbed. If we were concerned only in curbing inflation, we could have done with pursuing tighter monetary policies...if in the process the growth rate gets hurt, that would not do our country any good," he explained.