Manmohan explains what led to price rise in India

New Delhi: Prices situation that emerged in India was because of international commodity prices and since India is no longer a closed economy here were global recession.

Speaking in the Lok Sabha on Friday, the Prime Minister Manmohan Singh assured the House that his government was worried about spiralling food prices and would do everything possible to check it.

"There was drought. And, therefore there was pressure on prices," he said, adding "if we had dealt with price rise with tough monetary policy it would have depressed demand, resulting in large scale unemployment and industrial slowdown."

"I am the last one to deny that the behaviour of food prices has not been worrying. The House has my assurance that if any practical methods can bring further relief to people our govt will ensure that," the PM said.

"If we manage our economy well and creation of social and fiscal infrastructure well, reduce the scope of corruption then there is stopping us from India entering the age of double digit growth."

Prime Minister Manmohan Singh expressed confidence that the growth rate of the Indian economy will soon return to 9 per cent.

"Within fiscal year 2009-2010, the growth rate of the economy will be probably close to what I have mentioned 7.5% with conservative estimate of 7.2%. In the next fiscal year, we are confident of achieving a growth rate of 8% or more and the year thereafter we will be able to return the growth rate to 9%," the Prime Minister hoped.

"Prices of sugar have been rising due to three-year crop cycle; we will explore ways and means to check sugar prices," said the PM further.

The Prime Minister explained the government's position on Pakistan, from dialogue to denying pressure from the US or the need for mediation by Saudi Arabia.

"There's no alternative to talks. No US pressure and Saudi Arabia is not being asked to mediate," he told in Parliament.

"A calculated decision fact of the matter is the rest of the international community is for talking to Pakistan. Our talking will not isolate them. Dialgoue is the only way to forward. It's equally true that the terror machinery needs to be controlled by Pakistan," he said further.