Govt to take all steps to contain price rise: FM

[Sukumar]

Blaming the surge in inflation rate to the continuing rise in global
commodity and foodgrain prices, Finance Minister P Chidambaram has
said the government will make every effort to contain price rise and
ensure that it did not affect the poor.

"We will make every effort to contain prices, especially for the
weaker section," he said while winding up discussions on Budget in
Rajya Sabha on Monday.

Stating that fair prices to farmers would mean higher prices for
consumers, he said the interests of the poor will be protected though
it may result in higher subsidy outgo.

Pointing out that the government has already cut excise and customs
duties in the Budget to contain prices, the Minister said, "We will
take fiscal steps...we will urge RBI to take monetary steps. Its (RBI)
dharma is price stability."

He further added that the government would try to maintain growth
momentum while initiating measures to keep prices under control.

"I am confident that RBI will keep growth in mind, while taking
monetary steps," he said.

The Rajya Sabha later passed the vote on account and supplementary
demands for grants by voice vote enabling the government to meet
necessary expenditure pending passage of the Budget by Parliament.

With the Upper House approving the vote on account, Parliament on
Monday has completed the first stage of budgetary exercise for
2008-09.

The vote on account was approved by Lok Sabha last week.

Admitting the inflation is again on the rise; Chidambaram said it was
on account of relentless increase in the crude oil, commodity and
foodgrain prices in the global market.

As per the latest figure, the wholesale price-based inflation rate
touched 5.11 percent for the week ended 1st March.

Chidambaram said, "We have to be extremely vigilant about inflation
and ensure that it remains within the tolerable limit."

He said Indian stock markets are taking cues from the US and Asian
markets, even though sub-prime mortgage crisis has only moderately
affected flow of funds into the country.

Responding to worries expressed by Sharad Yadav of the Janata Dal(U)
about India becoming an importer of foodgrain, the Minister said "no
country as large as India can remain dependent on foodgrain imports...
It has to be self-sufficient in foodgrain."

The UPA government, he added, has initiated various steps to increase
rice production by 10 million tonne, wheat by eight million tonne and
pulses by two million tonnes.

"We have to give fair price to farmers," Chidambaram said, adding it
was not far from truth when the Prime Minister Manmohan Singh
described the outgo towards loan waiver scheme as "unpaid distress
bill of the previous government".

Elaborating on the theme of "unpaid distress bill of the previous
government", he said while the NDA government increased the per
quintal minimum support price (MSP) of wheat from Rs 550 (1998-99) to
Rs 630 (2003-04), the UPA raised it from Rs 630 to Rs 1,000.

He further said that the NDA during its rule increased the per quintal
MSP for wheat by only Rs 80, while the UPA hiked it by Rs 370.

Replying to Arun Shourie's (BJP) criticism on the National Rural
Employment Guarantee programme, Chidambaram said if BJP thinks the
employment guarantee programme and waiving loans for farmers were bad,
it should say so in its election campaign for the next general
election.

Referring to what some members call "communal budgeting", he said he
was deeply anguished at such comments.

N.Sukumar
Research Analyst
www.kences1.blogspot.com