Govt likely to ease imports

After reducing petrol and diesel prices on Thursday, the government may liberalise imports to control the escalating rate of annual inflation, which touched a two-year high of 6.73 per cent in the week ended February 3.

Commerce Minister Kamal Nath today said there were supply side constraints, which were contributing to the current rate of inflation.

"It is normal to have rates of inflation in the order of 3 per cent to 4 per cent in an economy growing at 9.2 per cent. Obviously there are supply side issues, because of which the rate of inflation has gone beyond the normal levels. The government is mulling certain steps so that the supply side issues are dealt with. Inflation should be under control shortly," said Nath on the sidelines of a UNIDO meeting.

He added, "If necessary, we will have to be more flexible on imports to ensure that supply side pressure doesn't lead to inflation."