M A I N   N E W S

Fry day
Inflation at 13-yr high, Sensex lowest of ’08
BJP, Left want FM to quit
Bhagyashree Pande
Tribune News Service

New Delhi, June 20
In a major embarrassment for the UPA government, inflation, powered by high fuel prices, has raced to 13-year high of 11.05 per cent for the week ended June 7. A rise of 7.8 per cent in fuel, power and lubricants prices and a 14 per cent surge in ATF prices have been the main cause of surging inflation.

The advent of double digit inflation saw the Sensex plunge 517 points — the lowest of 2008 — to close at 14,571 points. In the broader markets, the Nifty fell 156 points to 4,348 points.

After staying in the green during early trade, the Sensex began its plunge as details of rising inflation poured in during trading hours.

A worried finance minister P Chidambaram has made it clear that stronger monetary and fiscal steps coupled with measures to augment supplies are in the offing. “When the Cabinet met to decide hike in fuel prices, we had warned that this could lead to double-digit inflation. This is what has happened,” said Chidambaram.

Non-food articles were up by 1.04 per cent. Food articles, however, were down by 1.1 per cent. Inflation was 8.75 per cent for the week ended May 31. Besides fuel prices, rise in prices of food products, particularly edible oil and manufactured goods, added to the pressure on price line and woes of the government.

The wholesale price index was forecast to have risen to 9.82 per cent in the 12 months to June 7, which would be the highest since June 3, 1995, when annual inflation was at 9.89 per cent.

The finance minister said these were difficult times and enjoined upon the people to bear with the government, understanding the difficulties it was facing on account on global crude prices. Chidambaram said he had met petroleum secretary M.S. Srinivasan, finance secretary D Subba Rao and other concerned secretaries to analyse the situation.

Meanwhile, the BJP has blamed the UPA government for high inflation, and suggested that the Prime Minister and the finance minister should quit.

The BJP, on behalf of the nation, requests the Prime Minister and the finance minister to spare the country of their illustrious service, said BJP spokesperson Rajiv Pratap Rudy.

Rudy said this team of economic managers had broken their own record set during the Narasimha Rao government between 1991 and 1996.

Taking potshots at the finance minister, Rudy said Chidambaram had asserted in one of his budget speeches, “Main hoon na (I am here to help)”. The BJP would like to ask where he was now when the nation, particularly the common man, was suffering, he added.

The Left parties, who have been crying hoarse on the issue, also demanded dismissal of P Chidambaram. “We want immediate ouster of the finance minister, all fiscal and monetary measures of Chidambaram have totally failed and he has proved to be a failure,” said CPI general secretary A.B. Bardhan.

“Now the inflation has crossed 11 per cent and will go up further after the recent increase in prices of petroleum products,” said Bardhan, adding that the CPI and other Left parties had earlier warned the Centre of such a situation.

The FM should do some self-introspection, whether he had any utility in the government and the government should also think on the same line,” he said. The CPM called upon all its party units to step up the agitation against inflation and to mobilise the people to compel the government to take measures to curb price rise and provide immediate relief to the common man, the statement said.

The Congress on its part demanded that the Centre convene a meeting of all chief ministers and state finance ministers to take strong measures to check rising prices. The government can sacrifice growth to some extent to check inflation in order to help the common man, said Congress spokesperson Shakeel Ahmed.