Union Finance Minister Pranab Mukherjee on Tuesday admitted that rising inflation had been a cause of concern, but asserted that inflationary pressure was likely to be moderated by the end of the monsoon.
An analysis of commodities would reveal that inflationary pressure was not confined to food items. Inflation of food items went up in April-May last year reaching as high as 20 per cent in November. It came down later to 14-15 per cent, but showed an increase again, thanks to the hike in fuel prices.
“The average annualised inflation will moderate and the impact will be felt after the monsoon is over,” he said. Mr. Mukherjee was here to participate in a meeting of the Chief Ministers of southern States and Chief Executive Officers of public sector banks and financial institutions. K. Rosaiah was the only Chief Minister (Andhra Pradesh) present while Tamil Nadu was represented by its Law Minister and Kerala by its Education Minister.
Kisan cards
Mr. Mukherjee asked banks to increase kisan credit cards by 20 per cent and directed the Chief Ministers to closely monitor the financial inclusion plans of the State Level Bankers' Committees.
Later talking to journalists, the Finance Minister said the Congress promised to provide food security for all in its election manifesto and it was committed to provide foodgrains to below poverty line (BPL) families 25 kg of either rice or wheat at Rs. 3 a kg. The government was firm on enacting the Food Security Act for which the Planning Commission would determine the final figure of the BPL families as per the latest census report.
Two-fold efforts — ensuring availability of foodgrains by increasing production and providing some quantity of food at subsidised price to the BPL families — were on in this direction. The government allotted Rs. 50,000 crore as subsidy, but a final figure would be arrived at depending on the number of BPL families.
Farm credit
The government enhanced agricultural credit from Rs. 3.25 lakh crore in 2009-10 to Rs. 3.75 lakh crore this year to increase production from 225 million tonnes. Admitting that there was “perpetual deficit” of pulses and edible oil, Mr. Mukherjee said the government planned to develop 60,000 villages in the eastern region as “pulse and edible oil villages” on a mission mode and earmarked Rs. 300 crore for the same.
Responding to queries on a dispute pertaining to regulatory overlap, he clarified that the government would not interfere in the autonomy of the regulatory bodies. In the event of a conflict between two regulators, the government was contemplating to evolve a joint mechanism wherein efforts would be made to detect which regulator had the jurisdiction. “There will be no other action to interfere with their autonomy,” he said.
Asked about the high interest rates charged by the MFIs, he said legislation in this regard was under study.
