"If their behaviour (steel and cement manufacturers) does not change, government will not hesitate to take tough measures," Chidambaram said while intervening in the debate on rising prices in the Lok Sabha.
The Finance Minister admitted that "the cement and steel manufacturers are behaving like a cartel... and we have to break this logjam." He also assured the House that government will not hesitate to "sacrifice revenue to control prices".
Amid a walk-out by the opposition and Left parties, Chidambaram said inflation has gone up because of rise in international prices of commodities such as wheat, rice, edible oil and metals, apart from speculative activities in the market.
He said government has taken many fiscal measures in the Budget and cut customs duty on several items later to control prices, but states would also have "to take stringent measures against hoarders and prosecute them expeditiously."
Pointing out that RBI has already raised mandatory deposits by banks with the central bank eight times in recent past, he said that Governor Y V Reddy will assess the situation and take appropriate monetary steps.
When interrupted by the members who said the Minister was trying to shift the responsibility to state governments, he said the powers to take action under the Essential Services and Maintenance Act (ESMA) rests with them and added "if I have the power I will do it tomorrow."