Promising to consider stronger measures to tame inflation that touched a 13-year-high of 11.05 per cent, finance minister P Chidambaram today said a double digit rise in prices was anticipated when the government decided to increase fuel prices this month.“When the administered prices of petrol, diesel and LPG were increased, we had cautioned the Cabinet that inflation would touch double digit and that is what has happened,” he said. Petrol, diesel and LPG contributed to 94 per cent of increase in inflation for the week ended June 7, he said, and added this was expected.The government has come under acute criticism from the industry on the management of inflation with apex chambers saying that the situation appeared to have gone beyond the Centre’s control and it had little scope of manoeuvring.Chidambaram said: “these are difficult times. The government is aware of difficulties. Naturally, we will have to look at stronger measures on demand and monetary sides. We will try to address, to the best of our abilities, the demand and monetary sides and try to improve supply side also,” he said.Linking rise in inflation to surging global crude prices, Chidambaram said inflation was 3.1 per cent in November 2007 when crude oil prices were $98 a barrel. “On the day the Budget was presented it was $101 a barrel¿ From the day the Budget was presented, crude oil prices increased by almost 37 per cent,” he said. Though the minister could not say what steps would be considered to control inflation, economists feel that the Reserve Bank of India may go in for further tightening of money supply.
