New Delhi, May 9: The Congress-led government plans to take more steps to contain a runaway inflation rate, which climbed to 7.61 per cent, the highest in three-and-a-half years.

Top officials said the government might consider imposing a higher export duty on iron ore, reducing the excise duty on cement and clamping down on futures trading in more food products.

“It has come as a big relief that inflation in the current week is statistically stable (in relation to last week’s figure of 7.57 per cent),” finance minister P. Chidambaram said. “I repeat that more administrative steps will be taken if and when they become necessary.”

For the last few weeks, the inflation rate had steadfastly been above the 7-per-cent-mark, forcing the government to take a slew of measures to check the price surge.

The Manmohan Singh government is worried about the political fallout of rising prices on a series of state assembly elections this year. Both the oppositions, BJP and the Left, which support the government from the outside, have started public campaigns against the price rise.

The Reserve Bank of India, which has recently taken steps to check prices, has set a target of 5.5 per cent inflation rate for this fiscal. Bimal Jalan, former RBI governor, said, “We may have a growth rate of 7.5-8 per cent, I do not care. But inflation has to come down to 5 per cent. There are statistical issues in inflation also. But if inflation is a real problem, then we must be able to take decisions which are hard”.

Petroleum secretary M.S. Srinivasan, too, said today in Mumbai that it was time for the government to take “hard decisions” to rein in inflation, since it was running out of soft options in the face of rising global crude oil prices.

For the week ended April 26, the prices of primary articles, which have a little more than 20 per cent weight in the country’s wholesale price index, rose 8.8 per cent year-on-year. Prices of tea rose 11 per cent, spices, 3 per cent, and fruits and vegetables, 1 per cent. However, prices of edible oils and pulses fell after the government took steps to augment supplies through imports and check speculation at home.

“The measures taken by the government will show up in the coming weeks, but the rising crude prices will continue to push up inflation. It is not likely to come below 7 per cent in the coming months,” said Sonal Varma, an economist with Lehman Brothers.

Varma said the global crude price spiral was likely to increase the subsidy burden of the government. “The fiscal deficit is expected to go up to 3.5 per cent of the gross domestic product from the government’s projection of 2.5 per cent,” she said.

An option before the government to contain oil prices, while keeping oil subsidy steady, is to reduce the rate of taxes on oil products or to place a ceiling on it. The officials said these and other issues connected with the price rise may come up for discussion next week before the cabinet. D Joshi, principal economist with credit rating agency Crisil, said inflation was expected to hover in the 7-7.5 per cent range in the next few weeks.