New Delhi: Ruling out "panic or knee-jerk" reaction, Finance Minister P Chidambaram today (Aug 11, 2004) said that the Government would look at various options on fiscal side and the Reserve Bank on the monetary side to tackle inflation, which he expects would "settle down" by September.

"We must be vigilant and confident to tackle it, allow seasonal factors to play out. Fiscal and monetary steps will be taken in a measured manner. There will be no panic or knee-jerk reaction. We have told the Reserve Bank to take necessary monetary steps and we will look at options on the fiscal side," he said in an interview.

However, he declined to spell out the nature of steps the Government contemplates.

Attributing the "totally unexpected and unanticipated" spurt in international oil prices, Chidambaram said this was beyond the control of the Government and had fuelled the inflation to 7.51 per cent.

"Inflation is a matter of concern always. Even when it is at 4 per cent, attempts would be made to bring it down to three or two per cent. It is always a matter of concern until you kill the beast of inflation," he said.