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FM's Mantra: Lower Inflation Plus Growth

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Under pressure to check rising prices even at the cost of some growth, the government on Thursday said it is working towards moderating food inflation to 5 per cent while sustaining the growth momentum.

Making it clear that the current level of food inflation of 8% was "unacceptable", Finance Minister Pranab Mukherjee said "it should be around 5% which will be comfortable...6-7% can be tolerated". Replying to a debate in Lok Sabha on price rise, Mukherjee said the government had taken various steps to rein in inflation but did not outline the new strategy.

In response to various suggestions made by members during the debate, Mukherjee indicated that the government could consider doing away with subsidised diesel for passenger cars which consume 15 per cent of the fuel.

"Growth with moderate rate of inflation... that is what we want to achieve," Mukherjee said in nearly an hour-long reply which left NDA "disappointed" and was followed by a walk out by the BSP, SP, BJD, AIADMK and Left parties.

Through a division, the House rejected the amendment moved by CPI leader Gurudas Dasgupta which wanted a reference on the "failure" of the government to curb food inflation.

Later, it adopted by voice-vote the motion asking the government to take immediate effective steps to check inflation and provide relief to common man. With regard to removing subsidy on diesel for cars, the Minister said, the government could "accept the suggestion and try to work out.. what mechanism could be found so that this section is not subsidised."

Dismissing the allegation that nothing was being done to contain inflation, Mukherjee said, "The government's efforts have brought it (food inflation) down from 22 per cent to 8 per cent between February 2010 to July 11. It is not that the government is not active or it is not taking appropriate action".

The government, the Minister said, had been providing subsidised kerosene and foodgrains to poor to mitigate their hardship caused by rising inflation.
As regards measures for farmers, he said the government had been raising the minimum support price (MSP) for paddy and wheat, though it might not have been to the satisfaction of the MPs.

Mukherjee also had a response to former Finance Minister and BJP leader Yashwant Sinha's statement that the Opposition would be compelled to ask the Government to 'Go, for God's sake, Go', using the famous words of Oliver Cromwell in 1653 to the then British Prime Minister.

"What happened afterwards. Democracy went down...But the Parliamentary system was restored later", Mukherjee said, and reminded Sinha how the skeleton of Cromwell was taken out from graveyard and hanged by the British Parliament for destroying democracy.

Reminding NDA of the way Congress supported the Vajpayee government in enacting the Pension Fund Regulatory and Development Authority (PFRDA) Bill, he sought support of the Opposition in measures to carry forward reforms like Goods and Services Tax (GST) Bill and banking and insurance laws. "Please extend your hand of cooperation", he said.