The Hindu : National : Chidambaram promises steps to hold price line

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Tuesday, Mar 18, 2008
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Chidambaram promises steps to hold price line

Special Correspondent

NEW DELHI: Holding the surge in global commodity and food grain prices responsible for the domestic price spiral, Finance Minister P. Chidambaram on Monday assured the Rajya Sabha that the government would do everything to rein in inflation to ensure that it did not hit the poor.

In his reply to wind up the debate on the budget for 2008-09, Mr. Chidambaram said the government would “make every effort to contain prices, especially for the weaker sections.”

Pointing out that payment of fair price to farmers would lead to higher prices for consumers, he said the interests of the country’s poorer sections would be protected although it could mean a higher subsidy outgo.

Noting that the reduction in excise and customs duties announced in the budget were some of the measures to contain prices, Mr. Chidambaram said: “We [government] will take fiscal steps...we will urge [the] RBI to take monetary steps. Its [RBI’s] dharma is price stability.”

He assured members that while initiating measures to hold the price line, the government would strive to maintain the growth momentum. “I am confident that [the] RBI will keep growth in mind, while taking monetary steps,” he said.

The House later passed by voice vote the vote-on-account and supplementary demands for grants to enable the government meet essential expenditure pending parliamentary approval of the budget.

Inflation

Conceding that the rate of inflation was on the rise yet again, Mr. Chidambaram apportioned the blame to the relentless surge in the global prices of crude oil, commodity and foodgrains.

On the sharp slide on the domestic bourses, the Finance Minister said the Indian stock markets were picking up cues from the U.S. and Asian markets despite the fact that the sub-prime mortgage crisis in the U.S. had only moderately affected the inflow of foreign funds.

Despite these negative factors, Mr. Chidambaram maintained that the Indian economy had moved on to a higher growth path.

“We have delivered high growth...we will make every effort to maintain growth rate at well over eight per cent and close to nine per cent (in 2008-09).”

Allaying the fears expressed by Sharad Yadav of Janata Dal(U) that India might turn into an importer of foodgrains, Mr. Chidambaram listed the steps initiated by the government to augment rice production by 10 million tonne, wheat by eight million tonne and pulses by two million tonne.

Rebutting Arun Shourie’s (BJP) criticism of the National Rural Employment Guarantee Scheme, Mr. Chidambaram said if the BJP felt that the job guarantee programme and the farm loan waiver were fraudulent propaganda and bad, the party should say so in its poll campaign for the next general elections.

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