High inflation due to external factors: Pranab

Attributing high prices to external factors, the government today said it is working to moderate food inflation to 5% from over 8% now without sacrificing growth.

Replying to a debate in Lok Sabha on price rise, Finance Minister Pranab Mukherjee gave details of various steps the government had taken to rein in inflation but did not outline any further strategy in this regard.

"Growth with moderate rate of inflation, that is what we want to achieve," Mukherjee said in nearly an hour-long reply which left NDA "disappointed" and was followed by a walk out by the BSP, SP, BJD, AIADMK and Left parties.

Through a division, the House negative the amendment moved by CPI leader Gurudas Dasgupta which wanted a reference to the "failure" of the government to curb food price inflation.

Later, it adopted the motion by voice-vote.

Pointing out that the food inflation has come down from 22% in February, 2010 to 8.3% in July this year, he said, "I am not accepting it. This is not the bench mark."

Mukherjee said the comfortable level of food inflation is 5% but 6-7% can be tolerated.

Responding to the demand for removing subsidy on diesel used by passenger cars, Mukherjee said, "We can accept the suggestion and try to work out what mechanism could be found out so that this section (passenger cars owners) are not subsidised."