Prime Minister Manmohan Singh explained the inflation situation to Lok Sabha and assured the House that his government is doing its best to check the spiraling prices, especially of essential commodities.
Singh said, “There was drought. And, therefore there was pressure on prices. If we had dealt with price rise with tough monetary policy it would have depressed demand, resulting in large scale unemployment and industrial slowdown.”
He attributed price rise to the open economic policy of India. The global inflation left its mark on Indian markets, which was beyond the control of government. He said, “In years of shortage we depend on import of sugar, pulses. And when international prices of these commodities rise, I think there is inevitably an impact on our country.”
He added, “I am the last one to deny that the behavior of food prices has not been worrying. We have been worried. The House has my assurance that if any practical methods can bring further relief to people, our government will ensure that and will be sensitive to the concerns of the house.”
Regarding sugar prices, he said, “Prices of sugar have been rising due to three-year crop cycle; we will explore ways and means to check sugar prices.”
Manmohan Singh is confident that the fundamentals of Indian economy are strong and this year, the growth rate can reach up to 7.5%. The next fiscal, the growth rate can touch 8% and the year after that, it can clock 9% of the pre-recession times.
According to him, this is possible by able management of the economy and creation of social and fiscal infrastructure. Another area to be addressed is corruption. With all these in the right path, there is no stopping India.
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