Inflation to be kept below 5%: FM

Finance Minister P Chidambaram on Tuesday said inflation would be kept below five per cent and government would ensure that there was no shortage of essential commodities like sugar and pulses to check price spiral.

"We expect to contain inflation between four and five per cent this fiscal too. Last year, the Reserve Bank of India had indicated inflation at five per cent but we were able to keep it below five per cent," Chidambaram said.

Dissatisfied with the Finance Minister's reply, the Opposition BJP, led by former Finance Minister Yashwant Sinha, staged a walkout.

They said Chidambaram was not present during the debate and was not briefed properly about issues raised by members.

Elaborating on the price situation, Chidambaram said the inflation had to be looked at in the context of overall economic scenario.

"In a developing country like India with a high growth of eight per cent, some inflation is inevitable. When there was low inflation, the growth was also low. When credit expands it impacts prices," he said.

Chidambaram said prices of some commodities had declined in the last two years while in some cases these had gone up. "When prices go down producers complain," he added. He said the immediate cause of concern for government was increase in prices of pulses as there was a mismatch between demand and supply.