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Containing inflation is the top priority of the incoming Narendra Modi government.
Activities in the corridors of the finance ministry gained momentum as senior bureaucrats took presentations for briefing the new minister who would be sworn in next week.
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Finance Secretary Arvind Mayaram held one such meeting on Wednesday with officials of the Department of Economic Affairs. He also reviewed capital expenditure (capex) plans of public sector undertakings (PSUs). He has called for another meeting on Thursday to monitor the progress on the Goods & Services Tax (GST) and the Direct Taxes Code (DTC).
Cabinet Secretary Ajit Seth chaired a meeting on inflation on Wednesday to take stock of the government’s preparedness if there was a weak monsoon due to El Niño. Such a situation could put further pressure on the prices of vegetables and fruit. The government wants to ensure there is adequate food supply in the country.
El Niño is a weather phenomenon that disrupts rainfall.
Mayaram said: “This is a regular meeting which happens periodically. Nothing new. It happens every month.... We just gave our inputs.”
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At the meeting, officials of the consumer affairs and agriculture ministries provided inputs on food stocks and the likely production from the agriculture sector.
Retail inflation rose for a second consecutive month to 8.59 per cent in April, diminishing hopes of a rate cut by the Reserve Bank of India in its June 3 review of the credit policy. A sharp rise in the prices of vegetables and fruit at 17.5 per cent and 21.73 per cent, respectively, put the Consumer Price Index-based inflation at a three-month high. However, Wholesale Price Index-based inflation fell by 0.5 percentage points to 5.2 per cent in April from 5.7 per cent in March.
The trajectory of inflation, particularly food, would depend on the monsoon rains, predicted as “slightly below normal” by the India Meteorological Department as well as “slightly delayed.”
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The Bharatiya Janata Party (BJP) had said in its manifesto: “Our immediate task will be to rein in inflation by several steps, such as put in place strict measures and special courts to stop hoarding and black marketing, setting up a price stabilisation fund, unbundling FCI operations, etc.”
It had blamed the United Progressive Alliance (UPA) government for high inflation.
Mayaram also reviewed capital expenditure plans of 13 major public sector units, including Oil and Natural Gas Corporation Limited, Steel Authority of India and Bharat Heavy Electricals Ltd. “The whole idea is to prepare ground for the new finance minister and the new government to foster growth,” a senior finance ministry official said.
The official said there will be a separate review of capital expenditure plans of power and telecom PSUs before Monday.
The official hoped that PSUs’ capex plans in the current financial year would be higher than their capital expenditure plan in 2013-14.
“Last fiscal, we had capex plans of Rs 2.57 lakh crore for all the PSUs. We achieved Rs 2.48 lakh crore capex. This year we should look to better it,” he added.
The BJP manifesto had also talked of reviving investment in the economy. It also talked of bringing on board all state governments on GST, which has missed many deadlines for implementation.
Earlier this week, the cabinet secretary had asked ministries to prepare a presentation for the next prime minister. The brief was to list out the items on which action has been taken in the past few years, pending initiatives of the UPA government, and decisions that went wrong, along with things to be done immediately.
