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Lord Desai warns India over N-deal

india Updated: May 08, 2008 02:01 IST

PTI
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Eminent economist Lord Meghnad Desai on Wednesday came out strongly against moves to stall the Indo-US nuclear deal and claimed that if the deal did not go through, it would be a severe blow to India's international standing.

It would be a great loss to India's international standing as the nuclear deal appears to have been given a silent burial, Lord Desai told reporters on the sidelines of a conference here.

"Besides, it would take a lot of time to repair the damage," he said.

Terming as "disgraceful", pressure tactics by the Left, Lord Desai said that it was tragic that the UPA Government was losing its nerve (on the nuclear deal).

"The Left has no qualms about having the treaty with a foreign power if it is China but if it is America, it tries to find all the loopholes in the deal," Desai said.

He was also critical of the anti-north Indian campaign spearheaded by the Raj Thackeray-led Maharashtra Navnirman Sena, a splinter group of the Shiv Sena.

"You cannot have more partition (of the country)... Big political parties have a responsibility to resist such things," he said.

Lord Desai said that he was also amused over the hue and cry on US President George Bush remarks that food prices in the world were rising due to improving living standards in India and China, spurring demand.

"This shows the defeatist attitude of the Indians," he said.

Desai felt that soaring food prices were temporary and that they were bound to come down. He expected inflation to fall by October in India.

Referring to the firmness in food prices internationally, Desai said that it was a temporary phase due to mismatch in demand and supply.

He was also against stopping futures trading in commodities, saying that such a move would be a "wrong idea".

"What is needed is to reform the Food Corporation of India, which is unable to transport and warehouse food," he said.

"We are losing 10 to 15 per cent of our food production due to transport and warehousing problem. Large investment is required to improve the warehousing. We have done nothing in this regard in the last 30 years," he said.

The economist was against the Government absorbing the huge cost of the oil price increase which amounted to around Rs 95,000 crore.

This tantamounts to providing a huge oil subsidy which does not benefit the poor, he said.

The current rise in oil prices is cyclical and it could come down over a period of time, he said.

Oil prices, when they hit the USD 110 a barrel recently, have effectively gone past the peak level that was reached around 1980 (around USD 45) after factoring inflation, he said.