Chidambaram blames Inflation on soaring global oil prices

Union Finance Minister P. Chidambaram today blamed the rising prices of global crude oil for inflation in the country. He hoped the annual inflation rate to moderate, once the impact of lower steel and cement prices is felt.

New Delhi, May 16 : Union Finance Minister P. Chidambaram today blamed the rising prices of global crude oil for inflation in the country. He hoped the annual inflation rate to moderate, once the impact of lower steel and cement prices is felt.

The wholesale price inflation rate rose to 7.83 percent for the week ended May 3, its highest since November 2004 and above a median forecast of 7.50 percent in a Reuters poll.

"These are difficult times. The movement from 7.61 to 7.83 is indeed worrying but even amidst the dark clouds there is a silver lining. In a number of primary articles, we find a decline in inflation rate; there is actually a decline. In a number of food articles there is a decline as a result in the primary articles group the rate of inflation has actually declined in the week we are talking about. The rise in the overall inflation is because of the other two groups namely fuel and power lubricants and third manufactured products," the Finance Minister said in the Capital on the sidelines of an award function.

He said: "We reserve the right to take more administrative measures."

Chidambaram also said that unless global crude oil prices decline, India would continue to witness "pretty high inflation" in the fuel group.

But the main Opposition party, the BJP was not convinced by Chidambaram's assurances, describing them as "hollow". The party demanded from the union government to supply five essential commodities to people at subsidised rates to curb prices.

Party spokesman Prakash Javdekar said: "Bharatiya Janata Party is issuing a strict warning to the government to initiate some action, stop giving hollow assurances and to take a concrete step (to curb inflation). We demand that to provide relief to the common man five kilograms pulses, five litre oil and sufficient quantities of rice wheat and sugar should be made available for all from the public distribution system at reasonable rates, even if the government has to give a subsidy for it but till the time people get these subsidized five items, there will be no fall in price hike."

ANI