He hid fact that among G-20, India has highest rate of consumer price inflation
The Communist Party of India (Marxist) on Thursday refuted the “specious explanations” on inflation given by Finance Minister Pranab Mukherjee saying his statement hid the government's failure to check price rise.
Reacting to his November 22 suo motu statement in Parliament, the CPI(M) Polit Bureau said: “It is nothing but an exercise in deception to conceal the utter failure of the UPA government in checking the relentless price rise.”
While referring to the global inflationary trends, the Minister suppressed the fact that among the G-20 countries, India had the highest rate of consumer price inflation.
Equally appalling was the government complacency on the sharp fall of the rupee vis-à-vis the dollar and other major currencies.
Market volatility
“The depreciation of the rupee is adding to inflationary pressures because India has to import oil and fertilizers.” Rather than protecting the interests of ordinary consumers by stabilising the rupee value, the government seemed to be catering to speculative interests who benefited from market volatility.
Pointing out that rupee depreciation was mainly due to Foreign Institutional Investors (FII) pulling out massive funds from the Indian capital market, the CPI (M) said it had been constantly warning the Centre against liberalisation of speculative capital flows but the government refused to put any curb.
Fuelling inflation
Rejecting the government claim that excessive demand was fuelling inflation, the party said it was on account of the hike in the prices of petrol and diesel, fertilizers and other agricultural inputs, power and transport charges, etc.
Cost-push inflation
Also cuts in subsidies resulted in cost-push inflation and were having a cascading impact on food prices. The government was refusing to use the Public Distribution System effectively to provide an alternative source of cheaper food for mass consumption.
The CPI(M) demanded that the Centre direct the Reserve Bank of India to intervene in the market to stabilise the rupee, and curb speculative FII flows.
Other demands were that the government check price rise and inflation by rolling back fuel price hikes and reducing indirect taxes on petro-products, control fertilizer prices by enhancing subsidy, universalise the PDS and prohibit futures trading in sugar, wheat and other essential commodities.
Keywords: Pranab Mukherjee, Finance Ministry, CPI(M), Left front, price rise, inflation, rupee depreciation
It is a shame that a big country lke india, who can send rockets & missles are still importing fertilizer for its agriculture which is one of the major contributor to GDP but cannot open factories for it in india, spend 1000 of crores in giving freebees like TV, Laptop, grinder, mixie etc. on the other part, now getting ready to open up even food, grociery and other day to day commodities to the foriegn companies so that prices of these sophisticated outlet would pave way for further increase. our politicians are totally in their own fairy land, God save our country and me too.
The path of liberalisation seriously advocated and pursued by UPA II,has cost dearly on the living standards of Indians.Soaring prices are sought to be explained under some pretext or other, as the accountability of the ministers in the govt.is lying low. Sadly,the ivory tower does not smell the woes of crores of aam aadmi, that the govt swears to address.It is gratifying that CPM voices against FDI in retail sector as the lives of six crores of the people engaged in the trade will be unable to fend for themselves and be made to languish in view of the highly uneven platform, giving the corporate houses an edge to trample the small traders.
The real reasons for inflation is the generation of huge amounts of black money in the rel estate business, the easy avilability of cheap money for consumer spending and the high salaries given to employees by the service industries coupled with stagnating production of foodgrains and other agricultural products of mass consumption. Since the above described financial scenerio is made to order for high real estate and industrial growth, the PM and the FM will be happy with it even though for public consumption they may say that they are concerned. For those who think of ordinary people only once in 5 years at election time, such people's tavails will be of no consequence. At election time, they wiil bring out a sop or two for the people and garner their votes.
UPA2is just drifting. There is no determined effort to ameliorate the aam aadmi who continues to groan under inflation
Please Email the Editor