Good rains will rein in prices: Montek

As inflation touched a seven-year high of 8.75 per cent, Planning Commission deputy chairman Montek Singh Ahluwalia on Friday expressed hope that a good monsoon would help in controlling the prices of commodities.

"Today, inflation is on the rise and there is no denying that. It has become a major challenge for the government and we are taking all possible steps to control it," he said.

On the sidelines of a Panchayati Raj convention, Ahluwalia said that a good monsoon would strengthen the agricultural sector and bring down prices of commodities.

"Production and procurement of wheat has witnessed a great high in this season and if we have a good rainfall, then production of rice will also see an increase, which will in turn bring down the inflation rate to some extent," he said.

Ahluwalia rejected calls for the resignation of Finance Minister P Chidambaram on the issue of rising food prices, saying it would not serve the purpose as prices are high due to international reasons.

He said price rise is a problem that every country is facing and there are countries where the inflation rate is higher than that in India. He also backed the government's step to increase Minimum Support Price (MSP) for foodgrains.

Inflation: The silent killer!