GOVT SAYS NOT INSENSITIVE ON PRICE RISE

 Aug 2010

GOVT SAYS NOT INSENSITIVE, OPPOSITION SAYS IT'S IN DILEMMA

From Our Delhi Bureau 

NEW DELHI: The Lok Sabha on Wednesday adopted a Speaker-sponsored motion urging the government "to take further effective action to contain its adverse impact on the common man," after a day's debate on the price rise dubbed as "inflationary pressure on economy."

The day-long debate on Tuesday that was replied by Finance Minister Pranab Mukherjee asserting that the government was very much sensitive to the common man's difficulties yielded no solution to the price rise, even as the same type of debate ensued in the Rajya Sabha on Wednesday. 

Mukherjee hit back the Opposition challenging the government's sensitivity to people's plight, pointing out that it has not raised the Central issue price of foodgrains for PDS (public distribution system) distribution fixed back in 2001 to protect the vulnerable despite procurement prices raised several times. "That is sensitivity," he affirmed, adding that jobs to all in villages and right to education also reflect the government's sensitivity. 

He also told the Opposition not to question his own sensitivity in allowing increase in the kerosene price in June as he knew that the rural people will suffer when the price was raised from Rs 9 to Rs 12 a litre. "I am from a village... I studied under a kerosene lamp till my 10th class... commuted to school by walking, in today's terminology, 10 km  a day. And, so I know life of people in villages. Don't ridicule my sensitivity." 

PEOPLE DEJECTED: Opposition leader Sushma Swaraj, however, went a step further to point out in her response that the government is not only insensitive as she said while initiating the debate on Tuesday but Mukherjee's reply shows that it is in a dilemma ('duvidha-grast') of whether to reduc the inflation or not as it is focused on growth rate, unconcerned about those hit badly. "Vikas dar kisi aur ki, aur mahangayee kisi aur ko maar rahi hai," she remarked.

She said the people had expected that the government will yield to the sense of the House in giving some relief by rolling back the petroleum prices at last a little, but Mukherjee has dejected them as he only justified the inflation without spelling out a single measure to tackle it.

SUSHMA SOLUTION: As regards Mukherjee talking about encouraging construction of private and FCI godowns to prevent foodgrains rotting in open, she suggested an immediate alternative of giving wheat and rice allowance to the government employees to let them buy stocks for the full year in April. Thus, foodgrains would not rot and the government will not spend a single rupee as the advance given as loan would be recovered back from the salary, she said.

Mukherjee said the inflationary pressure is bound to come in the growing economy when there is a rise in people's income and admitted that excess liquidity in the market deliberately injected by the government to prevent the Indian economy's collapse is also the culprit. The government and the Reserve Bank of India (RBI) are gradually rolling back incentives to reduce the liquidity, but it cannot be mopped up fast lest there are no investments, no growth and no new jobs, he said.

As regards protecting the poor and vulnerable from the inflationary pressures on the economy, he advanced four solutions: Revamped PDS, reduction in excessive liquidity, increased agriculture production and GST."

GST AS PANACEA: Agreeing with Sushma that taxes too increase the prices, he campaigned for an early implementation of the Goods and Services Tax (GST) as the panacea for check on the domestic prices as also put an end to the sharp variations in prices of petrol, diesel and other petroleum products from state to state. 

He sought the Opposition's help to pass the GST Bill to be introduced in this session, asserting that "time is running out" as it has to first go before the standing committee and then it has to be ratified by 15 state assemblies before it can meet the target date of implementing from next April 1.

Reeling out statistics to show the food prices coming down in the last three months like wheat down from Rs 18 to Rs 14 a kilo, rice from Rs 23 to Rs 22 a kilo, Sugar from Rs 44 to Rs 31 a kilo and onions from Rs 23 to Rs 14 a kilo, Mukherjee called for collective responsibility of political leadership at Centre and States to provide further fast relief to the vulnerable members of the society.

He won't blame the states for not handling the situation effectively but he can not desist from pointing out that better PDS mechanism, Essential Commodities Act, maintenance of Essential Supplies Act, etc. are all for the state governments to enforce, Mukherjee said.

NDA REGIME: The BJP's Ananth Kumar intervened to accuse him of shifting responsibility on the state governments and sought explanation why the prices of essential commodities are rising during the UPA regime while they remained under check during the NDA regime from 1998 to 2004.

Mukherjee hit back, pointing out that the economic growth during the NDA rule was very little and hence there was no rise in the income of people. The BJP is attacking the government for increasing kerosene price from Rs 9 to Rs 12, but it forgets that the NDA raised it from Rs 2 to Rs 9 a litre. "I don't believe in this type of variated sensitivity," he remarked.

He said the food prices are affected by supply and demand. He expected them to come down but that does not happen, but now there are reports of substantial increase in crops that is bound to bring down the prices. 

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