He, however, exuded confidence that the overall inflation will come down to seven per cent on the back of steps being taken by the government. "Food inflation has also been a cause of concern. But recently, the situation has improved and I expect the situation to improve further."
"I will be the first one to admit that inflation in the last 18 months has become a problem. There were reasons beyond our control. First of all, there was the drought of 2009, there were natural calamities which affected the production of important products such as vegetables and onions," he said.
The food inflation had touched a high of over 18 per cent in December last year before moderating to 11.49 per cent for the week ended February 12.
Singh said the government was in control of certain commodities and can handle the prices of these commodities.
"...as far as cereal prices are concerned, the fact that we have large accumulated public stocks with the Food Corporation of India and public procurement agencies, we have been able to stabilise prices of cereals, wheat and rice."
There have been problems with regard to vegetables, meat and milk, he said adding that some of these items were beyond the government`s control.
"The government`s policy is to ensure that we control inflation but in a manner by which we do not hurt the growth of employment opportunities. If we have a ham-handed approach, we could have killed the process which is the only source of providing jobs for our youth," he said.
This delicate balance has to be preserved between control of inflation and protection of employment. "I think, that sometimes gives a feeling to ordinary people that we are not worried about inflation," Singh said.
"That is not the case. Our government stands committed to control inflation and I am hopeful that at the end of this fiscal year, the rate of inflation, at least the headline inflation will come down to about seven per cent."
He pointed out that world food situation has deteriorated and world prices of commodities like oil seeds and vegetable oil have risen sharply and added that on all these things India has no control.
Amid all these problems, he said that in the long run, in a country like India where agriculture prices are "kingpin of the price structure", the only way "we can control inflation is through increased production and increased productivity of agriculture."