“Government is not helpless and has means to ensure prices are brought down. More measures - both administrative and fiscal — are in the offing to control inflation,” Minister of State for Industry Ashwani Kumar told reporters here.
Stating that iron ore, steel and cement would continue to remain under the government scanner, he said, a series of calibrated measures would ensure that inflation is brought down by at least one percentage point in the next two months.
Voluntary measures
Prices of wheat, rice and edible oils have already come down between March 1 and May 6, Kumar said. Rice rice prices have declined by 1.6 per cent, wheat by 9.1 per cent and edible oil by over 18 per cent, he said.
The government on Wednesday suspended futures trading in gram, refined soya, potato and rubber for four months - a move aimed at arresting speculation-driven price rise to cool inflation that is over 7.5 per cent now. Mr Kumar said if the voluntary measures fail to yield results, “the government has administrative options which will definitely bring down prices.”
Burden of high prices
“All energies of the government are being focused on very comprehensive and calibrated steps to attack each factor that contributes to inflation from all angels,” he said, adding that a favourable monsoon and harvest would further ease the pressure on prices of foodgrains.
He said food prices in India are below the global level and the government has not passed the burden of high prices of imported food items to consumers, but “absorbed” it.
On the basis of extrapolation of prices, it has been observed that rates of pulses, edible oils and cement have declined between March 1 and May 6, 2008.
While price of pulses have seen a 7.69 per cent decline, that of edible oils have dropped by 18.93 per cent and cement by 2.91 per cent. Edible oil prices are likely to decline further by five per cent in view of large imports expected by mid-May, he said.
“The Indian Bureau of Mines do not expect prices to come down but stay at the new level for couple of months,” he said.
