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Thursday, Apr 17, 2008
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Centre for tough steps

New Delhi Bureau

Chidambaram: ready to sacrifice revenue to control inflation

NEW DELHI: Faced with growing pressure from the Left parties and the Opposition on rising prices of essential commodities, the government on Wednesday said it would not hesitate to take tough measures to control inflation.

Intervening during a discussion in the Lok Sabha on price rise, Finance Minister P. Chidambaram said the government was even ready to sacrifice revenue for controlling inflation.

However, his intervention saw members of the Left parties, Bharatiya Janata Party and the Samajwadi Party staging a walk-out.

Mr. Chidambaram pointed out there was need for more tough administrative measures, even as he outlined the fiscal and monetary measures taken in the past few weeks to check price rise. He asked the State governments to take action against hoarders and blackmarketeers under the Essential Commodities Act, and quoted a low figure of 348 cases of conviction last year.

“Raids and searches to check the stocks of traders have not been conducted, and only five States have done it, unearthing large quantities of food grains. I appeal to all State governments to invoke powers vested in them under the Essential Commodities Act. They can also impose severe stock limits and raid those who hold stocks above the prescribed limit,” he said.

When he turned to Public Distribution System, the Left members accused the Centre of slashing the quota of food grains under the PDS to the States. The Opposition also protested against “attempts to pass on the buck.”

Even as Mr. Chidambaram tried to defend the government by quoting figures during 2004 to 2007 on the lifting of food grains, which touched 313 lakh tonnes in 2006-07, the Left members staged a walk-out. The BJP and SP members soon followed them.

Cartelisation

The Minister accused the steel and cement manufacturers of forming cartels and exploiting the demand-supply situation. The country, he said, saw high growth over the past four years. There was need for supply to catch up with demand. The Reserve Bank had taken appropriate steps on money supply and liquidity. Fiscal measures, such as excise duty cuts, were also taken. “We have to take some tough administrative measures also.”

Mr. Chidambaram said that food, fuel and other items, which were being imported, witnessed high prices and even global prices had increased. “In many countries, inflation is on the higher side. We cannot lose our nerve and we have to hold firm on our path to break this logjam.”

Earlier, initiating the discussion under Rule 193, Gurudas Dasgupta (CPI) said inflation was much higher than 7.41 per cent, as it was retail price and not wholesale price that dictated the market. He accused the government of abject failure in controlling prices.

Confident that the government would leave no stone unturned in combating inflation, Sachin Pilot (Congress) said the BJP should ask retailers – “your core constituency” – to stop hoarding and open their godowns.

Basudeb Acharia (CPI-M) said the UPA government had failed to honour the mandate for change given by people.

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