FM for steps to stem prices, says don’t panic

In a statement circulated to the media by the Finance Secretary D Subbarao, Chidmabaram said he had met Prime Minister Manmohan Singh last night even as the political parties, including the Left allies, pilloried for what they called failure in management of prices.

Chidambaram also met Congress President Sonia Gandhi to appraise her of the situation and the steps that were being taken to tackle inflation, 94 per cent increase in which was due to hike in fuel prices.

First line of defence would be the monetary policy and the RBI is expected to take appropriate steps to keep a lid on inflationary expectations, Subbarao told reporters while fielding a barrage of questions on the Government’s course of action.

“Price management will be priority in a trade-off between growth and inflation,” he said, but added that inflationary pressures would be felt for next few months because of the base effect.