Ready For More Fiscal Steps To Check Inflation, Says FM

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New Delhi, Aug 19: The Union government is prepared to take more fiscal initiatives to contain spiralling inflation. Talking to newsmen, soon after the meeting of the Cabinet Committee on Prices (CCP) here on Thursday, Mr P Chidambaram said, “we will watch the situation carefully and if necessary, take more steps on the fiscal side.”

The government has already reduced customs and excise duties on petroleum products entailing a revenue sacrifice of Rs 2,500 crore in the current financial year. This will, to a large extent, neutralise the impact of rising global crude prices on petroleum products in the domestic market. The oil companies, for the time being, will refrain from increasing prices.

The inflation rate has been hardening for quite some time and shot up to 7.61 per cent in the week ended July 31. The inflation rate for week ended August 7 will be announced on Friday. It is expected that the rate of inflation will go up further as it would capture the price increase in petroleum products announced on July 31. Fuel, power, light and lubricants has a weight of 14.23 per cent in the Wholesale Price Index (WPI).

On the supply side, Mr Chidambaram said, “there is no cause of worry.” The minister added, “there is ample supply of commodities like sugar, grains and pulses. Perhaps because of drought in some parts, we might have seasonal inflation.”