M A I N   N E W S

Deflated by inflation
7.41%
Highest in 40 months
Bhagyashree Pande
Tribune News Service

New Delhi, April 11
It is a classic case of government not admitting that it is responsible for the mess created in the food plates and wallets of a country where majority still lives on the brink of poverty. The inflation surged to a new three-year high of 7.41 per cent for the week ended March 29 from 7 per cent in the previous week, but the government maintained that the rise in inflation was not due to the fault of its policies and blamed it on the global conditions.

Blaming the state governments for the mess, the government said the state governments should take effective action against hoarders and black marketeers.

After a meeting of the Cabinet, chaired by Prime Minister Manmohan Singh today, the government said it would take further measures to rein in the prices.

“We are very much concerned about the situation. But we don't have a magic wand. If more measures are required, they will be taken,” said science and technology minister Kapil Sibal, who briefed mediapersons.

Attributing the rising inflation to different factors, Sibal said there was reduced production of foodgrains due to global climate change, low level of stocks, higher consumption in emerging economies and demand for bio-fuel production. These factors, which have nothing to do with India, are given as an excuse because they form a part of the international media writings.

The government says that ‘We are importing inflation’. When the food, fertilisers and fuels are sold at subsidised prices, where in India is the leak to inflation?

PTI adds: Growing for the eighth consecutive week, inflation, based on wholesale price index, rose by 0.41 per cent in the week, a development that could lead to tightening of the monetary policy likely to be announced this month by the RBI.

Inflation, which was 6.54 per cent a year ago, last touched 7.76 per cent during the week ended November 6, 2004.

The common man was affected most by the surging prices of vegetables that showed an increase of 4.1 per cent during the week, while spices and pulses became dearer by 1.2 per cent and 1.8 per cent, in the wholesale market.

Price rise in these commodities would be much higher in the retail market going by the traditional difference in WPI and consumer price index.

Prime Minister Manmohan Singh on Thursday admitted that surging food prices were making it difficult to manage inflation but ruled out any "blind controls".

To make things difficult for the economy, steel, alloys, and other metals led the rising prices in the industrial sector.

While steel prices shot up by 5.6 per cent, basic metals became dearer by about 5 per cent during the week even as the government went into a tizzy to find solutions through a slew of fiscal measures and supply side management.

Cong gets defensive over price rise
Tribune News Service

New Delhi, April 11
Under attack from the Opposition BJP and its ally the Left parties, the Congress was at its defensive best on the inflation and price rise issue with the party today saying the government was tackling the issue seriously and had taken several steps to deal with the situation.

Calling soaring prices a matter of concern, Congress spokesperson Manish Tewari said “The government has taken several economic measures to address the situation which would take some time before showing results at the ground-level”. Tewari said the Cabinet Committee on Prices had taken economic measures on March 31 while today’s results were for the week ending on March 29. He also tried to drive in the point that current inflation figure was not entirely due to rise in food prices but was driven more by rise in the base metal prices.

Both the Left and the BJP have joined ranks to take on the government on soaring inflation while the warning the UPA that it would pay a political price if it failed to tackle the problem of unabated rising prices of vegetables and food articles.

CPM politburo member Sitaram Yechury said the Left would go to the people if the government did not take relevant steps to control inflation. He said the Left parties had sent detailed notes to the government on controlling prices. “We shared our concerns (with government). The point is to make the government take the relevant steps and that is what we wanted them to do and that is what we conveyed to them,” he said.

CPI national secretary D. Raja said if the government failed to tackle inflation it would pay a political price. BJP spokesperson Rajiv Pratap Rudy also said the surge in inflation marked the end of the UPA government and reflected the total failure of its economic policies.