New Delhi, February 28
Under tremendous pressure to control the skyrocketing prices of essential commodities, both Prime Minister Manmohan Singh and finance minister
P.Chidambaram today went out of their way to assure everybody that the UPA Government is alive to this issue and that this year’s Budget will scale down inflation.
That price rise weighed heavily on Chidambaram’s mind was evident as he acknowledged at the very outset of his Budget speech that inflation had risen over the past one year but promised to bring it under control through a series of remedial measures.
Manmohan Singh shared the finance minister’s optimism that the Budget will show the desired results. ”This Budget is anti-inflationary in more ways than one,” Manmohan Singh told mediapersons after the presentation of the Budget, adding that it also sent out a clear political message that the government has “remained faithful to the promises made in our common minimum programme.”.
The Prime Minister listed the reduction in excise and customs duties, the emphasis on improving the supply side and the National Programme for Pulses as some of the measures which will impart the necessary anti-inflationary bias to the Budget. Similarly, he explained, the fiscal and revenue deficit reduction is also aimed in the same direction.
He was confident the government will be able to check prices of food but added that it can always exercise the option to import items like foodgrains, oilseeds and edible oils, when faced with short supplies and domestic bottlenecks.
The Prime Minister and Chidambaram’s detailed explanation on the measures being taken to check inflation comes in the backdrop of growing
criticism from within the UPA, its supporting parties and the Opposition over the continuing rise in prices of wheat, pulses and
edible oils. The Congress is particularly surcharged as it is convinced that runaway inflation was among the chief reasons for its defeat in the Punjab and Uttarakhand polls.
Clearly constrained by this growing criticism, Chidambaram’s cautious speech was devoid of grand flourishes or big ticket announcements which failed to elicit a favourable response either from the corporate sector or the “aam admi”. “There is nothing dramatic in this Budget ...it could well be summed up as continuity with no change,” remarked a senior UPA minister.
Chidambaram’s speech skirted the controversial SEZ issue and carefully avoided any reference to financial sector reforms. On the other hand, the decision to ban forward trading in foodgrains coupled with the increased allocations for health, education, agriculture and the government’s flagship programmes are meant to send out a clear political message that the UPA remains steadfast in its commitment to the “aam admi”.
This was in piece with the Prime Minister’s pointed reference to the UPA’s enhanced spending on social infrastructure, education and healthcare. Prime Minister also promised to step up
infrastructure development, stating that the government is considering utilising a part of the foreign exchange reserves for this crucial sector.
