NEW DELHI: India’s government, battling to wrestle down soaring inflation, vowed stiff action on Wednesday against food hoarders and accused industry of forming cartels that have driven up prices.

The Congress party-led government is seeking to cut inflation running at over three-year highs of 7.41 per cent with national polls looming within a year.

Inflation is seen as hitting the poor masses — the Congress party’s biggest supporters — hardest.

Finance Minister Palaniappan Chidambaram told parliament the government, which has already slashed food duties and banned exports of pulses and other foods, would not hesitate to further “sacrifice revenues to control prices.” The government could take “fiscal steps, monetary steps and supply-side measures” to tame prices in Asia’s third-largest economy, he said.

But the government was fighting a worldwide phenomenon with prices of commodities such as wheat, rice, cooking oils and metals marching higher globally, he said.

“Inflation is mainly triggered by international prices,” he told parliament, where the government has faced fierce criticism over the rising cost of living. “This inflation is reflected in all the international markets.” The World Bank this week calculated that global food prices have risen 83 per cent over the past three years.

At the same time, Chidambaram said India’s states needed to maintain adequate food stocks and prosecute hoarders who were speculating.

Also he accused cement and steel manufacturers of “behaving like a cartel,” without giving details.

“We have to break this logjam,” Chidambaram said, warning of “tough measures... if their behavior does not change.” He added that controlling inflation would take its toll on India’s strong economic growth, warning that: “You cannot have both.”

The government has already said it is prepared to sacrifice some degree of growth in order to bring down inflation in the country of more than 1.1 billion where poor families can spend most of their household income on food.

The statements came as India’s Reserve Bank Governor Y.V. Reddy said the level of inflation was unacceptable and he would “make an announcement” at the bank’s next policy meeting on April 29 on reining in prices.—AFP