Prime minister Dr Manmohan Singh today asked trade and industry to absorb the rise in input costs  through improved productivity to maintain the price line. Addressing the Annual General Body meeting of the Confederation of Indian Industries (CII)  before the RBI announced its Annual Policy in New Delhi, the prime minister said that the industry must also pass on the benefits of tax and duty cuts to consumers. He also asked the business sector to take the responsibility for curbing inflation

He asked industry to play a more proactive role in the economy, the PM asked it to abandon short-term goals and help in ensuring long term growth.

Warning against cartelisation, Singh said, "Leaders of industry, particularly in sectors characterised by significant market power in the hands of a few producers have a societal obligation to assist the government in moderating inflationary expectations."

Dr Singh's call to the steel industry last week to maintain prices had resulted in major players announcing to hold the price line for three months.

''The prospects for domestic growth remain good if we can ensure price stability that will help sustain the growth momentum,'' he added. Dr Singh reiterated that the government was fully alive to the challenge and has taken several steps to reverse the recent spurt in prices. ''I am confident that we will be able to moderate the price rise,'' saying that steps taken by the government would help moderate high prices. 

 However, global controls were neede needed to curb price rise, he clarified. Referring to the sharp rise in global oil prices, he said that this has the effect of redistributing incomes away from oil importing developing countries to oil exporting countries. Expressing his dismay, Dr Singh said, that the "global response to this third energy crisis has fallen short of our expectations and compares poorly with the response to the first and second oil crises.''

The PM said that while the annual meeting was addressing the challenge of ''building people'', he emphasised that there was no denying that to make better use of the opportunities and to deal more effectively with the challenges we have to not only sustain the growth process at home, but also make it more socially and regionally inclusive. ''Investment in the capabilities of our people, particularly, young people is the most enduring way to make the growth process more inclusive,'' he added.

Dr Singh also called upon the industry to make commitment for sustained growth of productivity and innovation as an integral part of the philosophy of corporate management. ''It will help our firms, it will help the Indian consumer,'' he said. (See: Full text of Dr Manmohan Singh's address at CII)