New Delhi: Finance minister P Chidambaram, yesterday backed the petroleum minister Mani Shankar Aiyar''s view that state governments should help in controlling inflation by lowering sales tax on petroleum products.

"States must take a second look at sales tax on crude and petroleum products. I endorse Mani Shankar Aiyar''s appeal to the state governments in this regard, "Chidambaram said in his inaugural address at the economic editors'' conference in New Delhi yesterday.

He pointed out that the main reason for the inflationary pressures were the high petroleum prices caused by the high global prices of crude. Chidmbaram pointed out that the centre had already gone in for two rounds of duty cuts and would be wary of repeated cuts. "We have reduced customs and excise duties on petroleum twice this year and foregone revenues of Rs4,425 crore. We have to strike a balance between giving up revenue and funding development programmes," he said.

Stating that controlling inflation would continue to be accorded high priority, the government would intervene through fiscal measures if it spots any "irrational price movements," of commodities, he said. "If there is any irrational price movements of commodities we will watch and take fiscal measures to control it," Chidambaram said. He added that controlling inflation along with tackling the effects of delayed and deficient monsoons during the year and turbulence in the stocks markets when the United Progressive Alliance (UPA) government took over have been the three major challenges for the government. Stating that the government has taken measures to address all these challenges, Chidambaram hoped that the economy would grow by over 6 per cent during the current fiscal. "On the back of last year''s 8.2 per cent growth, which was on a low base of 4 per cent in the previous year, any growth rate of over 6 per cent should be considered satisfactory,'''' he said.