Govt to take fiscal, monetary steps to control inflation: PC
By Sanjay Garg | Mon, 10/24/2005 - 09:47
New Delhi -- For the last few weeks it is being seen that in with the increase in the prices of some of the commodoties, the inflation has been rising queit significantly. Government is quiet worried on the rising inflation.
Finance Minister P Chidambaram said the government would take fiscal and monetary steps to control inflation, but added that he expected the impact of the recent fuel price hike on inflation to be over.
Chidambaram said the government expected inflation to rise by one percent following the effects of the fuel price hike and "inflation has in fact risen by one percent".
"But I think the effects of the (fuel hike) pass through are over. I hope there is no second order inflation," he said on the sidelines of a function in Bangalore. "We will take fiscal and monetary steps to control inflation".
Asked if the inflation is "big enough" to raise concern on the interest rates front, he said: "Wait until Tuesday. I don't know what the Governor (of RBI) is going to do".
Asked if the interest rates would continue to be benign, Chidambaram said he hoped so. "But if there is a fuel price increase and as a result of that certain amount of inflation, then it's for the Governor (of RBI) to take steps".
On whether the investment is keeping in pace with the country's GDP growth rate, he said: "Given the current level of investments, we can sustain seven percent growth. But if you want a higher growth rate, the investment must be stepped up".
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