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Date
 21/04/2008
News Provider
 Kamar Nor Aini Bt Kamarul Zaman
News Source
 The Hindu
Headline
 Inflationary expectation driving up prices: Chidambaram

21/04/2008 (The Hindu), Kannur - Union Finance Minister P. Chidambaram has said that an inflationary expectation is driving up the prices.


Addressing a seminar on development, Kannur Vision 2020, organised by the District Congress Committee (DCC) here on Sunday, he said such an expectation was worse than inflation.


The Minister said the government had taken fiscal measures to ensure that people were not affected by the price rise. “The price rise is not forever; we will moderate this price rise,” he promised.


Attributing the present inflation to spiralling prices of crude oil, palm oil, urea and other imported items, he said the country was importing inflation when it imported crude oil and palm oil. The crude oil price, for example, rose from $37 a barrel in 2004 to $102 in March 2008. This inflationary trend would continue globally unless countries acted together to contain prices, he added.


He said a liberal and non-ideological approach to economy is the answer to the developmental problems of the country.


“We must take a non-doctrinaire approach when it comes to economic matters,” Mr. Chidambaram said. Any ideology that advocated irrelevance of growth should be repudiated.


Acknowledging that the Congress-led United Progressive Alliance (UPA) and the Left parties had differences that sprang from their different understanding of history, Mr. Chidambaram said these should not come in the way of their working together. Growth was fundamental for progress since without growth there could not be social justice and equity, he said. The country’s average growth rate in the first four years of the UPA government was 8.8 per cent while it was 5.8 per cent during the five years of the previous National Democratic Alliance (NDA) government.


India’s per capita income today was $1,000 which would increase to $2,000 in 10 years and $4,000 in 20 years. In 2020, India would be the fourth largest economy in the world, he said.


Elbow room
Stating that the government wanted the country’s economy to grow at close to nine per cent a year, Mr. Chidambaram said the present rate of growth had given the government the elbow room to launch schemes such as the National Rural Employment Guarantee Programme (NREGP). Though all political parties had spoken about the rural employment guarantee programme, no State barring Maharashtra had implemented it before the UPA government introduced the NREGP, he said adding that the Central government would extend the NREGP to all districts. Comparing the Central outlay for various sectors in the final years of the NDA government and the UPA government, the Finance Minister said the allocation for the education sector rose from Rs. 7,024 crore in 2003-04 to Rs. 34,400 crore in 2008-09.


The allocation for health sector in the current fiscal was Rs.16,534 crore as against Rs. 6,983 crore five years ago.


The outlay for Sarva Siksha Abhiyan rose from Rs. 1,951 crore in 2003-04 to Rs. 13,100 crore now and that for the mid-day meal programme grew from Rs. 1,175 in 2003-04 crore to Rs. 8,000 crore in the current financial year.




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