Govt is watching rising inflation: FM

Finance Minister Jaswant Singh said the government is concerned and watchful over increasing rate of inflation, ‘‘but there is no ...

Finance Minister Jaswant Singh said the government is concerned and watchful over increasing rate of inflation, ‘‘but there is no reason for alarm.’’

Singh made these remarks while addressing members of the consultative committee attached to his ministry, here on Thursday. The theme of the meeting was, Gulf War—impact on growth and inflation.

The minister said the major factors contributing to price rise are increase in oil prices on account of Gulf War, drought effect on edible oils and hike in prices in the manufacturing sector.

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The minister added macro-economic situation in 2002-03 remained comfortable despite drought, uncertainty on external front and delayed global recovery.

He said the Finance ministry had conducted a study in September 2002 to assess the likely consequences of the Gulf War. The minister added the impact of war was already, ‘‘in the reverse gear with global oil prices falling and six months futures in crude oil touching $22 per barrel.’’

Stating that historically India had strong bonds with Iraq, Singh said, ‘‘We have a particular role and mission in the restructuring of that country.’’ Responding to suggestions of some members, the minister said peace was being restored in Iraq and efforts would be made to facilitate Indian companies in carrying out their projects in the war-torn country.

The minister said, ‘‘The effect of the Gulf War on our economy is likely to be neutralised with a normal monsoon this year, as projected by the meteorological department.’’

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The members were of the opinion that India should exploit opportunities available in restructuring of Iraq. Among the members who attended the meeting were Dr Vijay Mallya, Kirit Somaiya, V. Saroja and Rajeev Shukla.