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March 06, 2007 13:04 IST
Finance Minister P Chidambaram said on Tuesday the government will continue to take fiscal, monetary and supply side steps to moderate the high inflation rate and will not hesitate to import foodgrains and pulses if need arises.
"The (then) government took 12 to 18 months to moderate inflation rate in 2000-01" when it hovered over eight per cent for 12 weeks and above six per cent for 48 out of 52 weeks, Finance Minister P Chidambaram said replying to supplementaries during Question Hour.
"(The current rate) of inflation is not as high as 2000-01. We are confident, inflation will be moderated," he said.
Inflation rate last week declined to 6.02 per cent from 6.5 per cent earlier, Chidambaram said adding it is expected to further decline when wheat and potato corp come in the market.
"We will continue to take fiscal, monetary and supply side steps to moderate inflation rate," he said.
The finance minister said while crude oil prices have declined by an all-time high of over 75 dollars a barrel, metal prices have spurted on international markets.
"Inflation spurts in the past have been moderated and we are confident of moderating the current rise," he said.
Chidambaram said demand-supply mismatch was the primary source for fuelling inflation. Production of wheat and pulses was way short of demand and in the long term augmenting production and productivity was essential to erase the gap.
The Budget for 2007-08, he said, has tried to address the shortcoming on the supply side by addressing key factors like water, seeds, fertilisers, power and farm credit.
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