With inflation rising to a 44-month high, finance minister P Chidambaram has warned steel and cement manufacturers that price cuts announced by them were not enough to cool prices. “As I said, we are waiting for steel and cement (price) reductions to come into force but we always reserve the right to take administrative measures if they are not enough. For the time being we simply have to remain patient,” he said. He added that if steel and cement price cuts kick in, there is still expectation that inflation will moderate. While inflation rose to 7.83 per cent for the week ended May 3, iron and steel prices declined by 1.7 per cent, while that of cement fell 0.4 per cent. The minister said the rise in inflation during the week was “indeed worrying”, but the decline in inflation rate in primary articles group was the silver lining. On rise in inflation in fuel, power, light and lubricant categories, Chidambaram said: “unless crude prices decline I am afraid we are stuck with high inflation in that group.” Chidambaram said that in fuel, power and light group category, every item is linked to crude oil. Lignite has shown a very sharp rise of 16.3 per cent because of overall fuel prices. “I have asked people to look into why lignite prices have risen very sharply in the week,” Chidambaram said.Aluminium, sulphate, synthetic yarn, agricultural implement have shown a sharp price rise, pushing up inflation in manufactured items category where, the minister said, roll back of steel prices have yet to come into effect. “The week has been difficult. I hope that what has happened in primary article group will be reflected sooner than later in the manufactured group. Overall, I am concerned but I hope we should just continue to be patient,” Chidambaram said.
