FM: Possible to contain inflation at moderate level

Emphasising the need for better coordination between the Centre and the state governments,Finance Minister Pranab Mukerjee told the Rajya Sabha that with a slew of measures taken by the government.

Emphasising the need for better coordination between the Centre and the state governments,Finance Minister Pranab Mukerjee on Thursday told the Rajya Sabha that with a slew of measures taken by the government,it would be possible for the UPA government to maintain inflation at a moderate level.

There are bottlenecks between the Centre and state governments. We have taken up the matter with the state governments and we shall have to collectively work to see how these supply bottlenecks can be removed, he said.

He said food inflation was back in double digits at 10.05 per cent for the week ended March 12,breaking a three-week-long downward spiral. The inflation rate for February stood at 8.31 per cent.

Replying to a debate on the Finance Bill,Mukherjee said he was concerned over the situation in West Asia and Libya as they meet most of Indias oil requirement.

If the situation in countries such as Libya and Bahrain turns bad,it would have a spiralling effect on India. If you look at our oil requirement8230;out of 100 million tonnes imported last year,67 million tonne or two-thirds came from Middle East alone, he said. He said there were six million Non-Resident Indians NRIs in West Asia.

If the situation remains unstable there,it is quite natural for anyone to express concern and to hope and to try,if possible,to restore normalcy,peace and stability in the region because our vital interests are linked to that.

The Finance Minister was more optimistic on growth,saying it would be in the range of 9 per cent in 2011-12 despite a likely slowdown in FDI. He said for growth,he was betting on robust domestic savings and a rate of investment in the range of 36-37 per cent.

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BJP leader Venkaiah Naidu raised the issue of waiver of loan interest to farmers as untimely rain has destroyed crops in Andhra Pradesh and asked Mukherjee to consider the matter before March 31.

Naidu statement came in the backdrop of banks fixing March 31 as a deadline for rescheduling of loan and interest to farmers. Mukherjee said that he would look into the matter.

Tapan Kumar Sen of CPM charged the government with giving tax relief to the affluent in the Budget and transferring the burden to the common man.

Burden of indirect tax is too high. It is 43 per cent of the total tax, Sen said,adding this was in a scenario where 84 crore people were forced to live in sub-human conditions.