New Delhi: Describing inflation at 8.1% as worrisome, Finance Minister P Chidambaram has said that steps will be taken to moderate and reverse headline inflation.
“Nobody has drawn any great satisfaction with inflation at 8.1%. But the measures, we have taken, have contained inflation. We are confident that we will gain mastery over this inflation and inflation will be contained over time,” Chidambaram told reporters.
“However, moderation depends on global crude oil and commodity prices. Surely, we are still in full control over the situation,” he added.
Crude oil prices, which touched a high of $135 per barrel, were trading at $126 per barrel on 30 May. The government is currently mulling how to address the issue.
Chidambaram said any increase in administered prices of petrol would have moderate inflationary impact in the short-term, but its effect on prices in the long-term could not be predicted as there would be cut in expenditure under some heads as well.
He said the UPA Government under Manmohan Singh will do its best to moderate, contain and reverse headline inflation.
Chidambaram said fiscal, monetary and administrative steps taken by the RBI and the government have contained inflation. “There are many other countries, which are not able to contain inflation at this level due to one or the other reason,” he added.
The Finance Minister once again said that the cement manufacturers have a scope to cut prices.
“I maintain that there is scope for cement manufacturers to cut prices, new capacities have been added, there is no reason why they cannot afford to cut prices,” he noted.
Following government intervention, companies have already announced Rs3 to Rs7.5 reduction in a cement bag of 50 kg.