The Hindu : National : Manmohan monitoring inflation

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Thursday, Sep 16, 2004

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National

Manmohan monitoring inflation

By Our Special Correspondent

NEW DELHI, SEPT. 15. The Prime Minister, Manmohan Singh, who is closely monitoring the inflationary trends, today met the Finance Minister, P. Chidambaram, and the Reserve Bank of India Governor, Y.V. Reddy.

Though consumer prices have not risen significantly despite the spurt in the Wholesale Price Index (WPI) by 8.33 per cent as of August 28, the Prime Minister is reported to be concerned about the political fallout of high inflation.

The Bhartiya Janata Party has announced plans to launch an agitation against the high inflation rate at the end of this month and even the Left parties supporting the Government from outside have expressed concern about the high inflation.

The Government has taken some steps to check the inflation rate by reducing excise and customs duties and by increasing the cash reserve ratio of the banks, aimed at sucking up liquidity from the market. But with global oil prices still ruling high, there are apprehensions that the inflation rate may go up further before tapering off.

Prior to the meeting with the Prime Minister, Mr. Chidambaram and Dr. Reddy had a meeting in the Finance Minister's office to take stock of the situation.

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