Friday, March 11, 2011

Pranab holds fort in reply to debate on the Budget

Finance minister Pranab Mukherjee shows himself to be the seasoned politician every time he stands up to speak in parliament. He measures his words, he tries to reach out to members on the other side of the House. He was at at again when he stood up in the Lok Sabha on Friday (March 11) to reply to the debate on the Budget and the passing of the Finance Bill. He said listening to the debate he learnt that 'more is expected from policy-makers'. In a subtle manner, he pointed out the people expect the government to handle the economy and solve the problems. But he said that there was not much that he would be able to do because 'as per the constitutional system, they (the issues) happen to be in the states' domain.' He said that as Union finance minister what he had to do was to create 'the right macro-economic environment, control inflation and ensure growth'.

He said that at the beginning of last year, the inflation was due to shortages in cereals. In the second phase, it was the prices of vegetable prices that shot up. He said that cereals and fruits contributed 9.5 per cent to the total weightage of 14.5 per cent. 'We kept the door open to imports,' he said. He also said that the 'non-existence of public distribution system (PDS)' has contributed to the problem and that it needs to be improved. He said this issue has been brought to the attention of the central government in a report submitted by a panel headed by Gujarat chief minister Narender Modi.
He gave comparative inflation figures for some other countries to show that it is a problem that is global. In Argentina it was 14.7 per cent, in China 11.7 per cent, Egypt 17.3 per cent, Indonesia 15.3 per cent, Pakistan 20.4 per cent and Venezuela 33.4 per cent. 'Global linkage is there,' he said.

He cited figures for the six-year growth rate of the UPA government which was 8.5 per cent compared to 5.8 per cent of the NDA government in the precdeding six years.

He said that he provided direct subsidy for oil companies directly instead of taking the route of oil bonds.

With regard to black money, he said that no quantum was specified. According to the a figure provided by the BJP task force it was estimated to be between US$500 million to US$1400m. The other figure was US$462 billion spanning the period 1948-2008.

He said the only was to track black money was through the legal means, through treaties avoiding double taxation and agreements to share tax information.

He conceded that 'Inflation is the most important issue which is to be addressed adequately.' He said that though food inflation which stood at 22.2 per cent in 2010 had been brought down to 9.3 per cent. 'This figure is not acceptable,' he said. But he said that inflation was riding high in other countries as well.

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