FINANCE minister Pranab Mukherjee has expressed se- rious concern over steady rise in inflation

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that touched 8.56 per cent last month. He assured that prices of essen- tial commodities would begin to slide in a few months. Mukherjee said that infla- tionary trend was disturbing.

He spoke to reporters after inaugurating an internation- al seminar on transfer pric- ing. "Rising inflation is a mat- ter of concern, no doubt. I'm afraid the trend of 8.5 per cent wholesale price index rise is disturbing," said Mukherjee.

Inflation of all commodi- ties registered a growth of 8.56 per cent for the 12 months to January after a 7.31 per cent increase in De- cember, as per data released by commerce and industry ministry on Monday. This was far beyond the RBI fore- cast of 8.5 per cent for the en- tire financial year ending March 31, 2010. Experts say inflation could end the year in double-digit figures. On the same day, agriculture minister Sharad Pawar said that food prices have started decreasing and would fall fur- ther by next month, accord- ing to PTI. Pawar also said that the government would not restrain large sugar firms from buying sugar from the domestic market.

Meanwhile, Mukherjee maintained that supply side measures had been taken and would take some time to impact price rise. "We have taken adequate measures on the supply side, which will take some time to have the pressing impact on rising prices. I hope that over a few months, it will be possible to have a moderate rate of infla- tion," Mukherjee said.

Inflation aside, the finance minis- ter has reasons to believe that the economy would register more than 8 per cent growth in the next financial year. He has estimated a growth of 7.5 per cent in 2009-10 on the back of a robust index for in- dustrial production in De- cember 2009. The industrial output for December stood at 16.8 per cent.

"The IIP figures for the month of December 2009 suggest that we may end the year 2009-10 with a growth rate of 7.5 per cent and next Sajith Kumar year at over 8 per cent," Mukherjee said.

Earlier, speaking at the seminar held by the Central Board of Direct Taxes (CBDT) and Organisation of Economic Cooperation and Development (OECD), Mukherjee said that transfer- pricing regulations have to play a special role in ensuring that profits are not shifted out.