Attributing rising inflation partly to stimulus and increasing global commodity prices, Finance Minister Pranab Mukherjee on Saturday said the government was committed to take all steps to moderate price rise. "We have to take all the necessary steps to keep inflation at moderate levels", he said while speaking at the 9th Pravasi Bhartiya Divas.
Mukherjee said the stimulus provided by the government to boost the economy in the aftermath of the global financial meltdown, among other things, was also responsible for rising prices. "In economy, every action has reaction. We have to face a situation where fiscal expansion led to rise in fiscal deficit... that led to unstable price regime coupled with the global commodity price increase. (These) are the current challenges of the policy makers," he added.
Led by a spurt in prices of onions and other vegetables, food inflation jumped to a year's high level of 18.32% on December 25. The government had already taken tough action against hoarding to check rising prices, especially of onions.
To help the economy combat the impact of the global financial crisis in 2008, the Reserve Bank as well as the government had provided several stimulus packages. These measures mainly included increasing money supply, lowering tax rates and hiking public expenditure.
While asking the Indian diaspora to invest and contribute to the country's growth and prosperity, Mukherjee said the government was making efforts to achieve double digit growth rate. "The reform process has continued at times gradually, with new initiatives on the anvil," he said, adding the aim is to achieve 10% growth rate.
"These policy measures are directed towards two major objectives. The first is to grow the economic pie in a sustained manner and boost GDP growth to a long-term path of over ten per cent per annum. "The second is to take concrete steps in order to ensure equitable and inclusive distribution of the fruits from this growth process", he added.