Price rise debate: Growth necessary,will check inflation,says FM

Mukherjee said the government had brought down food inflation from 22 per cent to 8 per cent,rebuffing charges that his government was insensitive to the poor.

He admitted the government was aware that more needed to be done to bring down prices. “Inflation is high and I accept it should be around five per cent,but it is beyond our control,” he said.

Replying in the price rise debate,Mukherjee also said ‘Hello India,goodbye world,’ would be the country’s new tagline,as opposed to BJP leader Yashwant Sinha’s ‘Goodbye India’ dig yesterday.

He told the Lok Sabha that under recoveries of public oil companies will be Rs 1.22 lakh crore this fiscal,stressing he can reconsider luxury tax on diesel consumed by passenger cars but the mechanism needed to be worked out.

Initiating the debate yesterday,BJP leader Yashwant Sinha had warned the government against treating Lok Sabha as “talking shop”. Sinha asked it to check rising prices. He cited an independent credit rating agency’s recent report that claimed that households across the country were forced to incur an additional expenditure of over Rs 6 lakh crore during 2008-09 and 2010-11 because of inflation.

Attributed high prices to external factors,the government said it is working to moderate food inflation to 5 per cent from over 8 per cent now without sacrificing growth.

Pranab Mukherjee gave details of various steps the government had taken to rein in inflation but did not outline any further strategy in this regard.

“Growth with moderate rate of inflation… that is what we want to achieve,” Mukherjee said in nearly an hour-long reply which left NDA “disappointed” and was followed by a walk out by the BSP,SP,BJD,AIADMK and Left parties.

Through a division,the House negative the amendment moved by CPI leader Gurudas Dasgupta which wanted a reference to the “failure” of the government to curb food price inflation.

Later,it adopted the motion by voice-vote.

Mukherjee said the comfortable level of food inflation is five per cent but six to seven per cent can be tolerated.

The Opposition,however,expressed disappointment over Mukherjee’s reply as he did not announce any step to contain overall inflation which is currently at over nine per cent for the month of June.

“I had expected the Finance Minister would announce 10 steps to be taken in the coming days and months to control inflation… not even one has been mentioned. So I express my disappointment… NDA is disappointed,” BJP leader and former Finance Minister Yashwant Sinha said.

He also took a dig at BSP and SP,which support the government from outside,for staging a walkout,saying they always take such steps to bail out the government.

Earlier,making a strong defence of the steps taken by the government to control inflation,Mukherjee,“These are difficult times… but that does not mean we should start eating lizards.”

Referring to Sinha’s contention that growth with high inflation was unacceptable,the Finance Minister said,“Let us not mix up growth (with) inflation. Let us unitedly (deal with the problem). The House is the citadel of democracy… Collectively we will be able to do so.”

He refused to accept that low inflation will help bolster growth. “There is no inherent contradiction in growth and inflation,” he said.

Reminding NDA of the way Congress supported the Vajpayee government in enacting the Pension Fund Regulatory and Development Authority (PFRDA) Bill,Mukherjee sought support of the Opposition in measures to carry forward reforms like Goods and Services Tax (GST) Bill and banking and insurance laws. “Please extend your hand of cooperation,” he said.