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Some inflationary pressure to remain in a growing economy: FM

Last updated on: February 22, 2011 17:12 IST

Some inflationary pressure to remain in a growing economy: FM

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Maintaining that "some inflationary pressure" will remain in a growing economy, Finance Minister Pranab Mukherjee on Tuesday urged the states to strengthen PDS to enable the government insulate the poor from the adverse impact of inflation.

Replying to members' concerns during Question Hour in Rajya Sabha, Mukherjee said the Centre is waiting for a report on how to strengthen and restructure the existing Public Distribution System in the country.

He informed the House that a committee consisting of some chief ministers to look into the issue was constituted in February last year after a conference of chief ministers in New Delhi whose report is awaited.

Admitting that there was a big difference between the price paid to a producer and the one paid by a consumer, Mukherjee said, "We shall have to take steps but this cannot be tackled by the central government alone."

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Image: Finance Minister Pranab Mukherjee.
Photographs: Reuters
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He was responding to a question by Congress member T Ratna Bai who asked the government about the measures being taken to control inflation.

"We can reduce the impact of high rising prices...If we could develop PDS, at least we would be able to protect these vulnerable sections...," Mukherjee said listing out schemes for providing foodgrains at cheaper rates to BPL families.

"In a growing economy, it will be difficult to say there would be no inflationary pressure....price increase is taking place all over the world. Some impact will be there. As a growing economy, some amount of inflationary pressure would be there," he said.

He, however, quickly added, "It is indeed the responsibility of the government to see it remains within manageable limits."

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Image: People buy vegetables at a market in Jammu.
Photographs: Mukesh Gupta/Reuters
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Replying to a supplementary by Ravishankar Prasad (BJP) as to when the consumer price index would come down, Mukherjee noted that consumer price index of industrial workers and rural workers has come down to single digit since August last year well after a gap of 16 months.

The minister agreed with Shivanand Tewari (JD-U), who said that the income of common man should also increase along with the growth in economy.

"This is an effort, the government has to do....this is the exercise we have to make," Mukherjee said adding the central government's flagship programme MNREGA has increased the purchasing capacity of rural households.

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Mukherjee also sought to remind Brinda Karat (CPI-M) that the minimum wages in West Bengal was Rs 56, when the central government had fixed Rs 60 as the wage to be paid to MNREGA workers in the past.

"I am afraid, madam, I would not be entering into debate....When I had fixed Rs 60 as minimum wage, the minimum wage in West Bengal was Rs 56," he said adding that a worker can purchase at least two kilograms of rice when the minimum wage is Rs 100 but he can do very little if the wage is Rs 8 or Rs 10.

Mukherjee also said strengthening of PDS is "essentially the job of the state government" adding that the Union government cannot be expected to monitor PDS from Delhi.

"If they (states) have an effective PDS system, we will be able to insulate these people from the adverse impact of inflation," he added.



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