Inflation control and robust GDP cannot go together: FM

[Sukumar]

Inflation control measures like sucking excess money out of the
economy and the robust GDP growth cannot go hand in hand, Finance
Minister P Chidambaram said on Wednesday.

"You cannot have both," Chidambaram said in the Rajya Sabha during the
debate on price rise issue.

Finance Minister's remarks came when senior BJP leader Murli Manohar
Joshi countered P J Kurien (Congress) saying tightening of money
supply would impact growth.

Kurien was defending the government on the issue of price rise stating
the Reserve Bank has revised eight times the Cash Reserve Ratio to
suck the liquidity so as to control inflation.

Chidambaram has recently stated that if GDP growth was to be
sacrificed by some margin, the government would not mind it for
controlling inflation.

The RBI is due to announce the annual Credit Policy on 29th April and
economists are expecting hike in the CRR in the wake of inflation
touching a three-year high of 7.41 per cent, bringing the government
under political and public pressure.

N.Sukumar
Resarch Analyst
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