The Hindu : National : ``No disconnect among Ministries ''

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Wednesday, Mar 07, 2007
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``No disconnect among Ministries ''

Special Correspondent

Inflation brought down after a time lag in 2002-03, 2005-06: Chidambaram

NEW DELHI: Claiming that there was always a time lag in dampening inflationary pressures, Union Finance Minister P. Chidambaram said he was confident of a moderating effect on price rise after the new crop came in and monetary and other policies, implemented by the Government took effect.

Rejecting charges of a ``disconnect'' among the Union Ministries of Agriculture, Commerce and Finance in countering the price rise, Mr. Chidambaram said in the Rajya Sabha on Tuesday that in 2002-03 and 2005-06 too, inflation was brought down after a time lag of 12 to 18 months.

He faced some trying moments during Question Hour especially after economist Arjun Sengupta (Independent) accused the Government of ``gross mismanagement'' of the economy. ``The problem today is on the supply side. With $180 billion as foreign exchange reserves, as a short-term measure, no attempt was made to flood the market with imported commodities [that were contributing to the price rise]. These have to be imported at subsidised prices,'' added Dr. Sengupta.

Mr. Chidambaram listed the commodities that were freely importable and said the Government had no hesitation in importing more but ``some items are simply not available.'' Pulses, for instance are under the open general licence, ``but where are the pulses? Myanmar, which partly meets India's needs, says it does not have enough exportable surplus. The answer to this for a country like India is to be self-sufficient [in food].''

Pointing out that forward trading in wheat, rice, urad and toor had been restricted, he said the Government would take further action on the basis of a report to be submitted by the Abhijeet Sen committee within two months.

Although the Parliamentary Standing Committee on Agriculture had suggested banning of forward trading in most commodities, the Government had decided to await the report, he said.

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