New Delhi: Prime minister Manmohan Singh on Friday said keeping the lid on inflation was a priority for the government, but controlling the price-line did not mean growth would be sacrificed.
Amid fears that a hike in petrol and diesel prices might fuel inflation, he said the government had taken an important policy stand to keep inflation under check and ensure inclusive growth.
But Thursday’s hike of petrol prices by Rs 2 and diesel prices by Re 1 could push up inflation rate in the coming weeks.
Calling inflation an iniquitous tax, he said: “It hurts the poor more than the rich. Therefore, it is essential that we ensure that the poor are not adversely affected by high inflation, particularly (that of) basic items of consumption. This is a matter of social priority and of their survival.”
Addressing the annual meeting of industry chamber FICCI here, he said he also saw no reason why India cannot sustain high growth, while successfully containing inflation.
“I know that some of you are not happy about our emphasis on inflation control. There have been some impatient editorials about the sacrifice of growth at the altar of inflation control,” he said.
“There are global concerns of a slowdown. We need to be aware of these concerns and we will take steps to limit their impact on us. The finance and commerce ministers are seized of the matter. I do not see any reason why we cannot sustain 9% growth even in the face of global slowdown.”
The annual wholesale prices based inflation rate was 6.58% during the corresponding week of the previous year. Analysts said inflation would rise further as hike in oil prices would push it up by about 20 basis points in the coming months.
The Reserve Bank of India deputy governor Rakesh Mohan said on Thursday that inflation was still high by world standards and should be brought down further.
In a policy review last month, RBI kept its key rates steady, saying inflation risks persisted, but signaled its readiness to act if turbulence in global Markets threatened growth and financial stability.
The central bank aims to contain inflation close to 5.0% in 2007-08 and condition inflationary expectations in the range of 4.0-4.5% with an inflation rate of around 3.0% as a medium-term goal.
