CCP meet on inflation tomorrow

Concerned at the "disturbing" inflation rate, that has spiralled to over 13-month high of 6.68 per cent, the government has decided to hold a high-level Cabinet Committee meeting on Monday to take stock of rising prices.

"The Cabinet Committee on Prices (CCP) will meet on Monday," Finance Secretary D Subbarao told reporters on the sidelines of a seminar on proposed amendments to 'Securities Contracts (Regulations) Rules'.was responding to a query whether any fiscal step to control rising prices will be forthcoming today.

Meanwhile, another high-level meeting will be held on Wednesday to consider measures for maintaining adequate supply line in the face of global pressure on prices, according to Commerce Secretary GK Pillai.

He had said yesterday that empowered Group of Ministers on prices, headed by External Affairs Minister Pranab Mukherjee, would meet on April 2 to review prices of rice and wheat and procurement of edible oil.

Earlier addressing the seminar, Subbarao said yesterday's inflation numbers were quite disturbing and attributed them partly to high global commodity prices.

Commodity prices are rising globally despite fears of recession in the US, he said "Generally, we expect commodity prices will go down when there is recession in the developed countries. If you look at past recession in the US, there is depression in commodity prices. But, this time there is elevation in commodity prices together with recession in the US," he said.

Together with surging inflation, the rupee had also risen yesterday to the highest level in a month to go below crucial 40-level to stand at 39.89/90 against the dollar, up 20.50 paise over the previous closing.

Subbarao said exports have come under double pressure because of Re appreciation and low demand due to recession in the US.

Finance Minister P Chidambaram said yesterday that the government would take every measure to keep prices under check, even at the cost of slowing growth.

"The government is determined to take all steps -- fiscal, monetary and supply side -- to moderate inflation and if that means we have to live with slightly lesser growth, so be it," he had said in Mumbai.

Describing inflation as a regressive tax, he had said, "We have to strike a balance between inflation and growth."

Attributing high rate of inflation to global crude, food and commodity prices, the finance minister had said interest rates were the most effective instrument to contain price rise.

Analysts also said they did not rule out further tightening of monetary stance by the Reserve Bank at its annual monetary policy review, slated for April 29, even if it affects growth.

Commerce Minister Kamal Nath had said in Delhi, "Any rise in inflation is a matter of concern ...the government is looking at a proposal to ban non-basmati rice exports. We are also going to recommend scrapping of import duty on steel."