Sinha vows to arrest price rise

NEW DELHI, July 13: Even as the inflation rate shot up to 7.41 per cent from 6.86 per cent, Finance Minister Yashwant Sinha tonight expresse...

NEW DELHI, July 13: Even as the inflation rate shot up to 7.41 per cent from 6.86 per cent, Finance Minister Yashwant Sinha tonight expressed confidence prices would stabilise in the coming weeks and said government would keep a tight control over money supply to keep inflation under check.

Blaming seasonal factors for the recent spurt in prices, he said “we are concerned by the soaring prices but we are confident that it would subside in the next few weeks particularly with the forecast of a good monsoon this year.” Prices of fruits and vegetables have gone up due to seasonal factors, he said in an interview. The inflation rate had steadily gone up from 5.65 per cent in the same period of last year to 7.41 per cent now.“Prices of potatoes and onion crop had risen following a crop failure due to excessive heat this year. But with the arrival of monsoons there are prospects of a good crop,” he said.

Referring to the rise in edible oil prices, he said government plans to import 1.5 lakh tonnes ofpalmolein from Indonesia and Malaysia. Nafed has also been asked to release 8,000 tonnes of onions to stabilise prices.Sinha said it is incorrect to say that the budget has stoked inflation. Neither is excess money supply responsible for it. “Money supply last year was as high 17 per cent and the total borrowings amounted to Rs 86,000 crore, yet inflation was under check,” he said.

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But the government was aware money supply can have a bearing on prices apart from seasonal factors and hence it was keeping a tight control on money supply at 15 to 15.5 per cent. “To put the blame on the budget for soaring prices was wrong as there was nothing in budget that could have had a cascading effect on prices,” he maintained.

Budget had not raised prices of fruits and vegetables nor had diesel prices and railway freight been increased. If at all budget has done anything it has reduced special customs duty to four per cent and reduced duty on edible oil to check prices.

Though imports of edible oil come underOGL, large scale imports did not take place because of high international prices in major edible exporting south-east Asian countries. Asked about the meeting of the core group of secretaries on disinvestment, Sinha said he was yet to ascertain details of the meeting.

Meanwhile, the core group of officials on disinvestment headed by cabinet secretary Prabhat Kumar, which met today, decided to move forward. “We are on target and its on track. We will meet again next month,” sources said.The government decided to divest equity of four public sector undertakings this year to realise Rs 5,000 crore from disinvestment. The four PSUs are Container Corporation of India (Concor), Gas Authority of India (GAIL), Indian Oil (IOC) and Videsh Sanchar Nigam (VSNL).

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After the meeting of the cabinet committee on disinvestment recently, Sinha said the first of these four PSU disinvestment will be kicked off in September.

The cabinet committee on information technology also met today under chairmanship of the financeminister. Sinha said the meeting considered operationalisation of recommendations of the task force on information technology. The cabinet commmittee will meet again in Friday.

The police said that Kumar, a resident of Turbhe MIDC in Navi Mumbai, was driving his concrete mixer truck when it collided with an SUV.

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