Govt, Oppn spar over price rise

Though food inflation eased sharply to 6.60 per cent in the week ended on November 26, the  lowest since August 2008, the statistics failed to cut any ice.  An unrelenting Opposition accused the government of pursuing wrong economic policies.  According to the government data released on Thursd­ay, food prices index was do­wn due to fast softening of onion, potato and wheat prices. Onion was cheaper by close to 40 per cent in the week under re­view, while potato prices were down by nearly 16 per cent.

Food inflation stood at 8 per ce­nt in the previous week. But, the prices of protein-based items continued to grow more expensive on an annual basis. Replying to the debate on  price rise in Rajya Sabha, Fi­na­nce Minister Pranab Mu­k­herjee said  the food prices we­re continuously showing a do­wnward trend in the past we­eks, but maintained that the pr­ices wo­uld not come down overnight.

He attributed the rise in overall prices to poor distribution system, international economy and rise in global petroleum prices.

He also sought the cooperation of the Opposition in containing prices and carrying out reforms, especially in foreign direct investment in multi-brand retail. The BJP, however, rejected the “state of helplessness” expressed by the finance minister and staged a walk out from the House.

Leader of Opposition in Lok Sabha Sushma Swaraj said rampant corruption in the government along with wrong economic policies was responsible for the skyrocketing prices.

Gurudas Dasgupta of the CPI, who attributed the current softening of prices to seasonal factors, asked the government to  aim at brining down inflation in the long term.

Experts too said the decline in inflation is an outcome of the plentiful kharif harvest.
Economists maintained it was too early for the Reserve Bank of India to reverse its monetary policy stance although growth in the previous quarters was stuttering.

“Although the growth scare has intensified in the last few months, it is too premature to say RBI will completely reverse its stance on December 16. A rate cut may come next March if inflation continues to decline,” Jyotinder Kaur, an economist with HDFC Bank, told Deccan Herald.

India's economy expanded 6.9 per cent during July and September, slowing from 7.7 per cent in the preceding quarter.