Govt admits achieving little success in curbing inflation

The Finance Ministry says that the measures to control inflation have resulted in limited success because of China and the buoyant credit demand in the Indian market.

Updated on: Apr 12, 2007, 22:32:29 IST

None | By Chetan Chauhan, New Delhi

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The government on Thursday admitted that its fiscal and monetary measures to control inflation was having only limited success in controlling inflation. And, one of the reasons given was China’s growing market economy.

Recently, the Reserve Bank of India has increased interest rate on all loans as one of the measures to check inflation. But, the Finance Ministry told the Cabinet that the measures had resulted in limited success because of China and the buoyant credit demand in the Indian market. "The international prices of non-fuel commodities have maintained a steady pace due to increased demand of these goods from China," the Cabinet was told.

The government has blamed short-supply of wheat, pulses and edible oil as a primary reason for constant rise in inflation. Inflation rose to 6.4 per cent in March 2007, highest in last six years. During the period, the consumer price index for industrial workers rose to 7.56 per cent whereas for others, it rose to 9.80 per cent.

But, what pinched the common man, resulting them apparently going against the Congress in Delhi municipal polls and Punjab elections, was over 12 per cent increase in prices of primary articles (goods of daily use). A year ago the prices of primary articles has increased only by 3.69 per cent. "The huge variation indicates why the rising inflation has hit the common man the most and their anger against the government," a senior government official said.

This rise in the prices of primary articles contributed 40 per cent to the overall inflation figures. Whereas, the commonly blamed sector - increase in fuel prices - contributed only 3.7 per cent to the inflation figures. Another sector that had a major contribution to increase in inflation was the manufacturing sector with a share of over 55 per cent.

The government has also admitted that it was not able to maintain steady supply of pulses, wheat and edible oil resulting in its prices skyrocketing.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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