New Delhi/Bangalore: Finance Minister P Chidambaram on Friday said that he felt confident of being able to tame inflation and appealed to the people to have faith in the government and keep patience.
“Inflation will be tamed... contained. My only appeal to the people is to be patient and have faith. The current spurt is because of international developments”, the Finance Minister said in Bangalore.
Inflation soared to a 42-month high of 7.57% the week ended April 19 on account of higher prices of vegetables, food articles, steel and some fuel items.
The wholesale price-based inflation rose 0.24% points from 7.33% in the previous week despite concerted efforts by the government and the Reserve Bank to check price rise.
While government announced slew of measures sacrificing a revenue of more than Rs 6,300 crore to contain inflation, RBI increased Cash Reserve Ratio (proportion of banks’ deposits maintained with the apex bank in cash) in three tranches to tighten money supply.
An increase of 0.75% in CRR is expected to suck out about Rs 27,500 crore from the banking system.
“Steps taken by government and RBI would lead to easing of inflationary pressure in future and it can come down to 5.55,” Crisil Principle Economist D K Joshi told PTI.
The common man was affected the most by surging prices of milk and rice that showed an increase of 1% each, while vegetables were dearer by 0.3%. Prices of tea went up by 17% and mutton by two per cent, while steel products became expensive by as much as 51%.
Inflation, which was 6.07% a year-ago, had last reached the high of 7.76% for the week ended November 6, 2004.