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Prime Minister meets top officials on curbing inflation

New Delhi: Prime Minister Manmohan Singh Saturday met top policymakers seeking ways to curb inflation which has been hovering close to double-digits for almost 9 months but did not announce any new measures to defuse the situation.

The meeting was attended by Planning Commission deputy chairman Montek Singh Ahluwalia, Prime Minister’s Economic Advisory Council (PMEAC) chairman C. Rangarajan and chief economic advisor to the finance ministry Kaushik Basu.

A senior official, who did not wish to be named, said the group discussed current domestic and global economic scenarios.

However there was no official statement on new measures the government plans to combat inflation which in spite of successive rate hikes by the central bank has remained beyond comfort level of both policymakers and the common man.

Latest official data showed India’s annual inflation based on wholesale prices at 9.72 percent for September, strengthening the likelihood of another rate hike by the Reserve Bank. The annual inflation was registered at 9.78 percent in August.

September is the 10th straight month when inflation has been over 9 percent, putting pressure on the central bank to hike interest rates.

The provisional figures for July too were revised upwards to 9.36 percent compared to 9.22 percent reported previously.

“The meeting will be on the current economic situation. We will have a discussion on growth and inflation, and consider the policy options in this regard,” Rangarajan had said Friday.

Although the RBI has indicated many times in the past that it would continue to adopt a hawkish stance until inflation eases, poor industrial output numbers for July and August will make the central bank hesitant in hiking rates by a significant quantum.

In its last review Sep 16, the central bank had raised the rep rate by 25 basis points. The RBI has hiked its policy rates 12 times since January 2010 in its war against inflation.

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