Yashwant Sinha, senior Bharatiya Janata Party (BJP) leader and former Union finance minister has criticised Union budget proposals saying that the measures proposed will contribute to inflation further, instead of controlling it.
“The Budget does not give any solid indication to control food prices and inflation. Rather than cooling it down, the government measures are going to contribute to the phenomenon,” Sinha said during a Bharat Chamber of Commerce event, recently.
“Rising prices of cement, coal and steel are expected to have a cascading effect on inflation. Moreover, higher subsidy figures and the government’s plan to increase petrol and diesel prices too will have a multiple effect. Inflation will surely go up, depending on the margin by which they are going to raise prices,” he added.
For the week ending February 19, the food price index stood at 10.39 per cent and the fuel price index climbed to 12.56 per cent. However, the wholesale-price index based inflation was at 8.23 per cent in January, compared to 8.43 per cent in December last year.
Advocating the government to improve the public distribution system (PDS), he said, “Food prices are not an issue of monetary policy, the problem lies in the supply side. Unless the Centre deal with it, it is going to rise further.”
Sinha, who has been the Union finance minister twice, believes that some measures during his tenure — like increase of kerosene, urea and LPG prices — were indirectly responsible for defeat of the National Democratic Alliance (NDA) in the Union elections of 2004.