Finance minister P Chidambaram today said containing
inflation was the government''s immediate priority, cautioning
that certain sectors of the economy were showing signs
said that inflation needed to be contained at a moderate
4 per cent through a mix of fiscal and monetary steps,
while addressing bankers in Hyderabad.
said that inflation had risen to a four-month high of
5.41 per cent for the week ended October 21, was largely
on account of rise in prices of primary articles. Rising
domestic consumption and strong credit growth have also
pushed inflation to a one-year high.
FM said that he was satisfied with the country''s growth
trend, though there were some signals of overheating in
the economy, such as in commercial real estate and housing.
He however expected the economy to grow at 8 per cent
for the fourth year in a row.
Reserve Bank has raised its lending rate four times this
year to combat inflationary pressures, caused partly by
the result of high oil prices, with the latest tightening
this week. Its repo rate hike early this week was a signal
that Reserve Bank was ready to take monetary steps to
check inflation. The government would simultaneously take
the necessary fiscal measures, he said.
admitted that the government had erred last year in supply-side
management of food grains, especially wheat, forcing imports,
but added that lessons had been learned this year.