On Friday, Finance Minister Pranab Mukherjee replied to the concerns of government’s critics. The IIP (Index of Industrial Production) growth figures for December and January came in handy to the FM.
During budget discussion, Mr. Mukherjee clarified that government has no intention of rolling back the fuel price hike. He said that the government has just restored the basic customs duty and not introduced anything new. The increase of 2% excise duty was also a rollback of the stimulus. This, according to Mr. Mukherjee, is done with long term policy gains.
He said, “I would love to respond to the demands but my financial condition does not permit me to do so. Please excuse me. Therefore, I am unable to do so.”
Mr. Mukherjee assured the disgruntled opposition that his government is doing everything to contain inflation. He said, “Nobody is denying inflation is a problem. But we have taken steps to check it. We have taken measures to remove the supply-side bottlenecks. We have ensured the availability of food items in the market and we have revised import tariffs.”
The FM promised the house that lower fiscal deficit envisaged by the budget will help in curbing inflation. He found support in the recently released IIP growth figures, which crossed the 15% mark for the two consecutive months of December and January. Mr. Mukherjee used them to prove that the economic growth is not driven by the governmental expenditure.
“…perhaps we can most humbly claim that there is a turnaround in the Indian economy. And 7.2% growth is not my pipe dream,” Mr. Mukherjee said in Rajya Sabha.
However, all these assurances could not manage to pacify the opposition MPs, as they staged a walkout en masse in protest.
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