Taming inflation is biggest challenge: FM

Wed, May 14 09:26 PM

New Delhi, May 14 (PTI) Finance Minister P Chidambaram today said controlling inflation is the biggest challenge before the government, and speculative money appears to have moved into commodities markets after turbulence in credit and stock markets globally. In an interview to CNBC-TV 18, he also said there is no intellectual argument in banning future trading, but the government suspended forward contracts in four more items for four months because the Abhijeet Sen Committee did not reach any conclusion and favoured existing ban on four items.

"India's biggest challenge is now inflation. Since the credit market and capital market have witnessed considerable turbulence, it seems that funds, money, speculative money has moved into the commodities market," Chidambaram said.

The minister described the move by developed nation to shift food crops for production of fuel as foolish, which is directly affecting India. "There has been a relentless rise in crude oil prices, commodity prices, petro prices.

Food prices also have been on the rise, thanks to the foolish diversion of food to fuel. We are directly affected by these price increases," he said.

On futures trading, he said "Intellectually, there is no argument for banning futures trade. The committee that went into that did not reach any conclusion.

It said that we have no conclusive evidence that futures trade has been fuelling a price rise." "But the same committee said that the current ban on four items should continue, giving rise to a demand that we should ban more items on commodities exchanges.

" Justifying the government move to ban futures trading in rubber, soya oil, potato and gram, he said that a parliamentary panel as well as political parties, including BJP that introduced futures trading, demanded the ban. PTI.

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