Bangalore, April 17:

Union Finance Minister P Chidambaram today said that the current inflation rate of 3.5 per cent at the wholesale price index (WPI) was within the tolerable level and manageable.

“Though zero per cent inflation will be very satisfactory, in a developing country like India, we cannot aim at such a level. About 3.5 per cent at any measure is tolerable. “It is a measure at the WPI index, which indicated the central bank (RBI) is managing the inflation in a commendable manner,” Chidambaram told reporters on the sidelines of Biocon’s new facility on the outskirts of the city.

Asserting that there was no change in the constructive principle of either the WPI or the consumer price index (CPI) from what it was last year, Chidambaram said the indices were relative measures at which the inflation rate was indicated. “Our WPI index is constructive proportionately. All indices are relative. There is no change in the principle applied to construct indices this year as it was last year. There is no reason to find there is suddenly something wrong with the indices,” the minister said.

Denying reports on liquidity crunch or interest rates firming up, the finance minister said the RBI would address all these issues in its busy season credit policy, which was due for announcement tomorrow. “Interest rates are still at sub-PLR (prime lending rate).