Kerala Governor R. S. Gavai expressed concern over growth of extremism, corruption, inflation and price at the national level, in his address to the Assembly on Friday.

The Governor told the Assembly that the widespread corruption in all branches of State machinery as evident from revelations on 2G spectrum sales, land scams, Common Wealth Games Scandal and the enormous black money part in foreign bank accounts.

“All these underline the predatory nature of the crony capitalism in India. The liberalisation and privatisation reforms have proved to be also a process of primitive accumulation. The total erosion of ethical plane of our national movement from the administration is breeding pervasive cynicism. The crony capitalism will ultimately adversely affect he growth, not to say of inclusive growth.”

Mr. Gavai said that the growth of extremist forces, the Maolists and the communal terrorists posed a grave danger to law and order and national unity. “The pauperisation of large segments of the population in the country side and the frightening inequality that the globalization process is generating provides a fertile field for the growth of extremism. This challenge cannot be met merely through administrative action. It requires also a political response to ensure more egalitarian growth and also protection of the secular values.”

He noted that Kerala had remained relatively a haven of peace, but for certain minor communal incidents. “Our secular heritage as well as effectiveness of our law and order machinery has contributed to this outcome. Nevertheless certain recent development has revealed the links of extremists to communal outfits in the State. We have to be vigilant to safeguard our secular values.”

The Governor said that the inflationary conditions were the foremost among the economic issues that confront the country. India’s economic recovery was stronger than that of western countries. However, the anti-inflationary demand management measures that the Central government was comtemplanting were going to adversely affect growth.

As the primary cause of inflation was the manipulation by hoarders and speculators, the appropriate response should have been on the supply side to rein in the speculators.

He said that the frequent increase in the prices of petroleum products fanned the inflationary trends. There was no transparency in the process of price determination, and the present hikes could not be justified.

He observed that the double digit inflation imposed severe pressure on the State Government’s expenditure side. It robbed the ordinary people of substantial portion of their income and transferred it to the boarders and speculators.

Noting that the State government considered controlling of the price rise as the foremost important task, Mr. Gavai said that the State’s Budget would unveil its response to the situation. To further control the prices and ensure food security, the government would supply 13 essential commodities through all the fair price shops at subsidised rates in a phased manner. The Central government should meet half of the total cost of Rs. 337 crore for this. (The Centre had rejected the proposal which had since been re-submitted.