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Dispel ‘misinformation’ on price rise issue: Minister

PUDUCHERRY: Union Finance Minister P. Chidambaram on Sunday called for concerted efforts by the Congress party and the United Progressive Alliance (UPA) government to “dispel the misinformation” on the price rise issue.

Inaugurating the regional rural bank named after poet Subramanya Bharathi here, he said if the reasons for the soaring inflation and the steps taken by the government to contain it were properly explained to the people, they would appreciate the government’s predicament.

Mr. Chidambaram, who also addressed the party activists at the Puducherry Pradesh Congress Committee office, expressed the confidence that the government and the party would be able to convince the people on the UPA government’s keenness to address the issue against the backdrop of the crude oil price jumping from $35 a barrel in 2004 to $135 now. The government had the strength and the requisite resources to tackle the problem, he said.

Denying that the current inflation rate of 8.1 per cent was unprecedented, Mr. Chidambaram said under the NDA rule in 2000-2001, it stood above 8 per cent for 12 weeks.

He explained how the steep hike in the crude oil price had a cascading effect on the prices of essential commodities. “Though the Left and the Right have been urging the government to curb price rise, the crude oil price has been controlled by the Organisation of Petroleum Exporting Countries,” he said.

The government had resorted to tough measures such as reduction of Customs Duty and Excise Duty, scaling down of Central Sales Tax from 3 per cent to 2 per cent, relaxation of import controls and imposition of ban on export of certain essential articles, besides providing tax relief for individuals, Mr. Chidambaram said.

Stating that Prime Minister was much concerned about the increasing inflation rate, he said the government had been adopting a three-pronged strategy to keep inflation under check in the medium term through effective fiscal and monetary policies and administrative measures, he added.

The UPA government had been implementing innovative schemes such as the National Rural Employment Guarantee Act, Jawaharlal Nehru National Urban Renewal Mission and Right to Information Act. But the previous NDA government could not implement such schemes, owing to “lack of strength and resources” then, he said.

Recalling that the farm loan stood at Rs.83,000 crore during the NDA rule, he said it had risen to Rs.2,50,000 crore in the last financial year. Though the government had fixed a target of Rs.2,80,000 crore for the current year, he expressed the hope that it would touch the Rs.3,00,000 crore mark. The farm loan waiver scheme had been expanded costing the exchequer a total of Rs.71, 680 crore, he pointed out.

The assistance for the small and medium enterprises had jumped by 20 per cent every year. Though it was promised to double the quantum of assistance in five years, the target was achieved in four years, he said.

The growth rate stood at 9 per cent, he said, adding that the UPA government was able to achieve all this due to factors including the increase in the tax revenue.

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