PM hopes to see moderation in food prices

Manmohan Singh was returning to New Delhi after his three-day official visit to Saudi Arabia. "There is some escalation in prices but my hope is that now that the new rabi crop is coming into the market, prices that have caused a great degree of concern like wheat, sugar, oilseeds, pulses will see some moderation and that the economy has the capacity to absorb this hike in oil prices without setting in motion any inflationary spiral."

Asked whether the government would consider any rollback in the hike in fuel prices, the prime minister said: "Any increase in prices does hurt some section of people but we have to take a long term view. We cannot save people from inflation if we follow all along populist fiscal policies."

He said that if populist policies are persisted with for a long time to come, sooner or later "it will lead to the erosion of the investment climate, will lead to a erosion of our capacity to create new jobs and will lead to the erosion of our capacity to invest in our flagship programmes for our poor people". "So, we have to balance these factors," he said.