Centre fully prepared to combat inflation: FM

Finance Minister P Chidambaram has said that the government is taking all necessary steps to curb the rising inflation. He said that an unusual combination of factors like growing GDP, the increasing year-on-year credit and money supply has contributed to the rise.

"There is an unusual combination of factors. The GDP growth in the Indian economy is at over 9%, the year-on-year credit is growing at over 30% and money supply is growing between 20-21%. One has to proceed with great deal of deliberation in moderating these factors," Chidambaram said while addressing a press conference in Mumbai on Saturday.

The inflation figures rose to a two-year high at 6.58% for the week ending January 27, despite the rollout of the fiscal and monetary measures to control the overheating in the economy. The numbers stood at 6.11% a week ago. The FM added: "There are three factors that will help in bringing down the inflation: fiscal measures; the monetary policy, which the Reserve Bank of India is looking after; and the supply side constraints. Sugar prices have come down, (following imports being allowed). Similarly, prices of wheat and agri commodities are also expected to come down by the end of the month."

Earlier, delivering the keynote address at the second Association of NSE Members international convention, he suggested that to cut the cost of regulating the huge number of market intermediaries in the Indian capital market, intermediaries in the Indian capital market should ideally merge.

"In the Indian capital market we have around 30,000-odd brokers and sub-brokers and various other intermediaries. Not most of them are active. A sizeable number of them are inactive, increasing the regulatory costs. I urge the industry bodies for a possibility of consolidation of the intermediaries to reduce the regulatory costs," said the finance minister.

[Courtesy – http://www.financialexpress.com ]

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Corporate Study Team,
IMERT, Pune