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Don't push up commodity prices, Chidambaram warns producers

By Our Special Correspondent

NEW DELHI, AUG. 10. Union Finance Minister P. Chidambaram today warned producers of commodities not to take advantage of the worldwide increase in commodity prices and appealed to consumers not to give fillip to inflationary expectations. The Government was taking action to control inflation.

Speaking to reporters after a meeting of the Union Cabinet, he said some producers were pushing up prices taking advantage of the worldwide increase in commodity prices. This was not justified. "I would advise the producers not to push up the prices.'' The consumers, in turn, could curb inflationary expectations by not buying at higher prices, he added.

Spiralling inflation

The spiralling inflation was a matter of concern for the Government and it was taking steps to contain it. He had held discussions with Prime Minister Manmohan Singh and RBI Governor Y.V. Reddy and it has been decided to take "measured'' actions on both monetary and fiscal side. RBI would take the action according to its judgment on the monetary side and the Finance Ministry would look at some options on the fiscal side.

One must, he said, look at the underlying causes for "the sudden spurt'' in inflation. It was because of the significant rise in petroleum prices, some seasonal fluctuations and inflationary expectations due to delayed monsoon. For instance, the Indian basket of crude oil is ruling at $ 37 a barrel, whereas last year at the same time it was $ 26 a barrel. "It is not for the first time, inflation has crossed the seven per cent level. But the Government is not complacent,'' Mr. Chidambaram said. The issue did not figure at the Cabinet meeting.

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