Manmohan Singh possibly soothed some nerves in his party when he told the Congress plenary on Monday that he expected inflation to stabilise at 5.5% by March. A worried Congress had asked the government to maintain constant vigil on rising prices and address the issue with “candour and courage”.
The party’s economic resolution said neither the Centre nor states should tolerate “inefficiency or corruption in the system that lead to artificial scarcity or goods or arbitrary increase in prices”. The Centre, it said, should ask the states to deal “sternly with hoarding, black-marketing and profiteering”.
The Prime Minister also projected a growth rate of 8.5% for the entire year and between 9% and 10% from the next year onward.
“Inflation remains a cause for serious concern.... We have made all the efforts to contain inflation and we will continue to do so. In recent days, the rate of inflation has come down to 7.5%. We expect this downward trend to continue,” Singh said.
In November, inflation declined to 7.48% from 8.58% in the previous month. However, food inflation rose to 9.46% for the week ended December 4 from 8.69% in the previous week.
The Congress has come under sharp attack from the opposition, especially the BJP and Left, for not doing enough to control prices. The parties had called an all-India shutdown in July to protest the soaring prices of commodities. Even key UPA allies — Trinamool and DMK — have protested over price rise.
Aware of political sensitiveness of the issue, Congress president Sonia Gandhi in her opening remarks at the party conclave asked the government to keep prices of essential commodities at affordable levels.
Referring to economic growth in his address, Singh said despite the global economic crisis, the country has been able to maintain a healthy growth rate.
Home minister P Chidambaram compared growth rates of NDA and UPA. “The highest growth rate during NDA was 6.4% while the lowest in UPA I stood at 6.7%. The average growth rate in entire NDA rule was 5.8%. Ours is a mirror image — at 8.5% during UPA I, 7.4% in first year of UPA II with second year poised for 9%,” he said.