Arguing that a growing economy was bound to feel inflationary pressure, Finance Minister Pranab Mukherjee today emphasised a collective responsibility of the states and the Centre to curb the price rise.
“If I want to compromise on the GDP growth, export growth, I can surely control the inflation. I can even adopt the mechanism to fix the prices. But we do not want that type of a situation in the country. We want that goods should be available, producers must get remunerative prices, and economy must grow,” Mukherjee said.
He pointed out to a united Opposition that most of the tools to control the difference of prices between producers and retail stage gap lay with the states. “Public Distribution System is to be implemented in the States. Essential Commodities Act has to be implemented by the state governments. Maintenance of essential supplies is to be implemented by the state governments. Unless there is a coordinated effort both by state governments and the central government, I am afraid, it would be difficult to address this problem,” Mukherjee said.
He also tried to touch emotional chords on the issue of price rise when he spoke about his childhood in a village. “I am a village boy. I studied up to Class 10 under a kerosene lamp. I used to commute to my school by walking 10 km every day. So, I know the life of a villager,” Mukherjee told the House.
He cited reasons for the price rise and subsequent measures taken to control it. The Opposition continued to attack the government. Leader of the Opposition Sushma Swaraj said: “The government is justifying the price rise but not spelling out new measures to give common man some relief.” Former Agriculture Minister and JD(U) President Sharad Yadav interrupted Mukherjee and said: “All measures of the government have so far failed to control price rise.” Finally, Speaker Meira Kumar vertificied the passing of a sense of the House resolution, asking the government to take “further effective steps” to control inflationary pressures.
The finance minister cited reasons like excess liquidity, rise in income levels, and the fiscal stimulus of Rs 1,85,000 crore for the current price rise. Strongly defending the decision to raise the prices of petroleum products, the finance minister told Lok Sabha: “Sushmaji (Leader of Opposition Sushma Sawaraj) said my Budgetary exercise had been to balance the Budget. Yes, I admit because I do agree that this level of fiscal deficit cannot be maintained.”
“Appropriate monetary policy is mopping up the excess liquidity. But, if interest rates are raised abnormally, naturally there will be no investment, there will be no growth, and there will be no job creation,” he added.
The finance minister emphasised revamping the public distribution system to protect the poor from the price rise. “Yes, mehangai (price rise) is a problem. But at the same time availability is equally a problem,” he said.
