Union Finance Minister P. Chidambaram on Saturday responded to the BJP’s prime ministerial candidate's remarks on inflation, saying, “After his history lessons, Shri Narendra Modi has delivered his first lesson in economics... all economists may take note of the new lesson.”

The Finance Minister was responding to Mr. Modi’s remarks at an election rally at Jodhpur, where he said Mr. Chidambaram had attributed inflation to gold-buying. “I am not as educated as him... but I know inflation is not because of buying gold but due to corruption,” Mr. Chidambaram’s statement quoted Mr. Modi’s remarks in newspapers.

In his response to the statement, Mr. Chidambaram denied attributing inflation to gold-buying: “I recall having said on many occasions that buying gold, which is almost entirely imported, worsens the current account deficit. I don’t recall saying that buying gold causes inflation.”

The two politicians have been exchanging remarks against each other. On Wednesday too, Mr. Chidmabaram had issued a statement challenging Mr. Modi on the value of the rupee during former the Prime Minister A.B. Vajpayee’s tenure. Mr. Chidambaram’s statement said: “We can add another item to our collection of items under the chapter ‘History Lessons from Shri Narendra Modi’.”

The Finance Minister’s statement on Wednesday was in response to another report about Mr. Modi’s remarks in his address at an election rally in Khetri, Rajasthan, where he had said “Atalji didn’t let the value of rupee fall despite sanctions” adding that “Atalji conducted nuclear tests... did not bother about sanctions and conducted another nuclear test two days later... Despite all this, Atal-ji did not let the value of rupee fall... But see what is happening today under an economist Prime Minister.”

The nuclear tests referred to by Mr. Modi in his election address were conducted by the Vajpayee-led government on May 11 and May 13, 1998.

Mr. Chidambaram’s statement on Mr. Modi’s claim gave the exchange rate of the rupee in March 1998 when the National Democratic Alliance (NDA) had first formed the government (Rs. 39.49 to the dollar). “It declined to Rs. 42.84 in May 1999 when the NDA again formed the government after the elections,” Mr. Chidambaram’s statement had said. “It further declined to Rs. 45.33 on May 21, 2004 when the NDA demitted office.”

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