Inflation may ease in coming months: PM

Underlining the need to control the rise in prices, Prime Minister Manmohan Singh today said he expected the inflation rate to moderate in the coming months, with the price stabilisation led by a new crop of wheat and prices of other commodities.

"Well, the inflation rate has edged up, but I will not take an alarmist view. The Reserve Bank has taken some monetary measures (to control the situation). And my own feeling is that with the coming in of the new crop, the prices of wheat will stabilise, while other commodities that are leading to a rise of the wholesale price index, will be brought under effective control," Singh said. He was speaking to reporters while on his return from a two-day visit to The Philippines.

However, the prime minister warned that the increase in inflation could not be taken lightly. "We will remain sensitive to inflation because it inflicts hardship on the poorer sections of society. We are very mindful of the fact that we must have mastery over inflation," he said.

The comments come in the backdrop of the recent increase in the wholesale price index-based annual rate of inflation, which touched 5.58 per cent for the week ending December 30, breaching the RBI's target range of 5-5.5 per cent for 2006-07.

The rates for the previous weeks have also undergone an upward revision, underlining the trend and prompting fears that interest rates will see another upward revision at the forthcoming monetary policy review by the RBI.

The prime minister also said steps would be taken in the coming months to address issues in the agricultural sector. "The process of globalisation has brought gains to our industry and trade, which are moving forward at an unprecedented rate. Our economy's growth rate has also picked up. But, it is also true that the benefits of this process are not percolating to all sections of society. I am worried about growth in the agriculture sector, which has not been what it should be. In the coming months, we will take steps to ensure that the needs of rural India are taken care of."

The PM added most of the issues with regard to the proposed FTA with Asean had been resolved. Dwelling on the East Asia summit meeting that he attended today, Singh said he had highlighted the need for all countries to encourage civil nuclear cooperation with India.

PM on oil prices:
"I am not an astrologer to predict what the prices will be," was what the PM said to parry a question on petrol and diesel prices. However, he made it clear that the country could expect a decline in retail prices if international prices of crude oil came down.

China a step ahead on FTA:
In response to a question on China, which signed an agreement on trade and services at the Asean summit, PM said: "We are a late starter in this process. We have several steps to cross. Ultimately, the destination is the same, to encourage the growth of cooperation, which will ultimately lead to a free trade area in East Asia. It will take some time before we reach there. We are moving at a pace which our system can sustain."

On Pakistan:
"We have to take a holistic view of our relations with Pakistan. We have had several rounds of composite dialogue, in which Siachen and Sir Creek issues figured. We are making progress. It will be premature for me to say that we have reached a stage where an agreement can be signed. It will be my effort to sustain the momentum."