Friday, September 29 2006 17:18 Hrs (IST) - World Time -

New Delhi: The Government today (Sept 29,2006)said that mismatch in the supply and demand of wheat and pulses was impacting the inflation rate and other than this, the price rise was moderating since the last two-three weeks.

"I must admit that there is some pressure on food prices. The impact of supply-demand mismatch in wheat and pulses continues to impact inflation index especially Consumer Price Index (CPI)," Finance Minister P Chidambaram told reporters.

On the steps taken by the Government to reduce mismatch in supply-demand of wheat and pulses, the minister said the steps have helped in moderating inflation but, my intention is to keep wholesale price index at four per cent or less.

He said that he was meeting RBI Governor later today and would exchange views on what steps need to be taken to moderate inflation further.

He, however, said that the Government would continue to take monetary and fiscal steps to keep inflation under control.

He also hailed the UPA Government's performance saying ever since this government has taken over the quarterly economic growth has been over seven per cent except in the second quarter of 2004.05.

"In fact my feeling is that we can grow close to eight per cent every quarter provided we follow prudent economic policies and put faith in fiscal discipline," the minister said.

Hailing the good performance put up by the manufacturing sector, Chidambaram said, "I am particularly happy with the growth of the sector. In the first quarter of this fiscal it achieved a growth of 11.3 per cent."

He said the index of industrial production (IIP) from the sector grew at 11.2 per cent.

Chidambaram said government will ensure that credit requirement of the manufacturing sector are not denied or delayed and given at reasonable interest rates.

"We want to make India manufacturing hub, we must aim to be among the top three players in the world in a dozen two industries," Chidambaram said.

He also said the services sector continued to grow at a satisfactory rate achieving 10.6 per cent in the first quarter of this fiscal as against 9.8 per cent last year.