Government concerned over inflation

The finance ministry admitted that the increasing inflation, which has now crossed 6 per cent, was a cause for concern and it would take "corrective" measures to control the "cyclical" phenomenon.

"Yes it is a matter of concern. The rise in inflation was due to cyclical factors. But we will take corrective measures," Finance Secretary DC Gupta said.

Chief Economic Advisor in the finance ministry Ashok Lahiri added that the annual inflation rate was likely to start falling from the third week of January because of the base effect.

Lahiri also said the finance ministry was closely monitoring the situation and was confident that it would start moving southwards. Both Gupta and Lahiri were speaking on the sidelines of a seminar organised by the NIPFP.