India making “serious efforts” to tame inflation

New Delhi (Reuters): The government is making serious efforts to moderate inflation, Prime Minister Manmohan Singh said on Tuesday.

India’s annual headline inflation eased slightly in October to a 10 month low but at 8.58 percent was still above the Reserve Bank of India’s (RBI) comfort zone.

“I can assure ... that our government is making serious efforts to moderate the inflation rates. We have difficulties but we shall overcome”, Singh said at an Indian labour conference.

Singh made his comments in reference to the price of essential commodities.

Food inflation, which has been in double digits for over three months, has been described by the Reserve Bank of India as contributing to overall inflation.

However, India’s annual food inflation eased for the fifth consecutive week in early November, probably due to new crop arrivals in the market, lending support to expectations that the RBI would hold rates steady in the near term.

This is in contrast to Asian powerhouse China which is taking direct action to control inflation.

The People’s Bank of China said last week that it would raise the percentage of deposits that commercial banks need hold with the RBI by 50 basis points.

China’s State Council said it will adopt 16 measures to stabilise consumer prices, including temporary subsidies and price monitoring according to local media reports.

However, China has stopped short of raising interest rates for now, fearing a rush of speculative money into the economy.