PMspeak: India's inflation imported | New rehab act for poor

PRICE OF GROWTH: PM said India was among the fastest growing economies in the world.

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New Delhi: With India's annual inflation rate ballooning to 12.44 percent, Prime Minister Manmohan Singh on Friday appeared defensive on the issue, saying the recent spurt in prices was a global phenomenon.

"Our government has worked hard to ensure that in India the rate of inflation is not as high as in many other countries," Manmohan Singh said in his Independence Day address from the Red Fort.

"I know how much each one of you is concerned about the recent rise in prices. The inflation we have seen this year is basically due to external factors," he said, adding that his government had kept prices of several commodities stable.

According to the Prime Minister, the Reserve Bank of India (RBI) too had taken steps to moderating the growth of money supply so that inflation can be controlled.

"However, while making these efforts we should avoid doing anything which hurts our growth," he said, adding that with an expansion of nine percent per annum, India was among the fastest growing economies in the world.

The Prime Minister said his government was also taking determined measures to bring prices under reasonable control and that he had urged all chief ministers to ensure adequate availability of food for the poor at reasonable prices.

This apart, he said, prices of kerosene, fertilisers, wheat and rice had not been hiked, while the full impact of the rise in fuel prices had also not been passed on fully to consumers.

Manmohan Singh's comments came against the backdrop of data on wholesale prices released Thursday that showed that India's annual rate of inflation rose further to 12.44 percent - the highest since May 1994.

"After being nearly stable for four weeks, this rise has come as a major disappointment," the finance ministry said in a statement, indicating that the administrative and monetary steps were not yielding the desired results.