Pranab has no 'magic wand', says inflation down

Finance minister Pranab Mukherjee today told Parliament his government wanted economic growth but at a moderate of inflation. Mukherjee was responding to the BJP's demand to compromise even on economic growth, if need be, to control the runaway prices.

Finance minister Pranab Mukherjee on Thursday told Parliament his government wanted economic growth but at a moderate of inflation.

Pranab said that there was no inherent contradiction between growth and inflation and the government was trying to achieve growth with a moderate rate of inflation.

"India was never known to have a high growth rate," Pranab said. "We have brought inflation down from 22% to around 8%."

He said in the 1980s, India's gross domestic product (GDP) growth averaged slightly above 5%, and around 6% in the 1990s, which were relatively low compared with the growth of around 8-8.5% now.

"Was inflation low at that time? No!" Mukherjee said, adding several steps were needed to tame inflation and that the house -- both the members of the treasury and opposition -- must collectively ensure these measures are allowed to be taken.

His comments came against the backdrop of India's annual rate of inflation based on wholesale prices inching up to 9.44% for June from 9.06% for the week before and opposition's demand that the government either tames price rise or quits.

Mukherjee was responding to the Bharatiya Janata Party's (BJP) demand on Wednesday that the government should compromise even on economic growth, if need be, to control the runaway prices.

Launching the debate on inflation in Lok Sabha, BJP leader and former finance minister Yashwant Sinha said: "If growth means inflation, we don't want it. We won't accept inflation above 3%."

He wanted the government to control prices in two months.

With IANS inputs