Mocking government’s efforts and its claim to contain inflation, the price hike in most of the commodities especially foodgrains are going skyrocketing day by day. The latest Wholesale Price Index (WPI) has made flout the government’s all efforts to rein inflation by posing a new hike in Inflation at 8.24 percent, a 45-month high for the week ended May 24.
However, the prices in some food items like fruits and vegetables have come down since last week, but the new hike in crude oil would expected to raise the prices of all commodities, and that effect would certainly reflect in the next two-week report of WPI data pertaining to June 7 and thereafter in its report to be released on June 20 and later weeks.
According to latest WPI report, the inflation has surged to 8.24 percent from previous week’s 8.10 percent on the back of spiralling prices in food items including cereals, spices, milk, fruits and edible oils besides price hike in some essential manufactured items such as iron and steel.
Ministry of Commerce and Industry on June 6 released the inflation data reporting the inflation in basic articles group rolling to 9.28 per cent, from 8.86 per cent in the week ended May 17, with cereals (7 per cent), fruits (8 per cent), milk (8 per cent) and spices (11 per cent) showing spurt in price levels while in manufactured item, it has raised to 11 percent in dairy products, 12 percent in edible oils and 31 percent in iron and steel prices on a year-on-year basis.
Since last December, Inflation in the manufactured products has risen by 393 basis points that is 199-week high in this sector.
The Finance Minister on this uncontrolled inflation iterated that government would not hesitate to take more steps to curb inflation. “We have taken fiscal, monetary and administrative measures, and we are willing to take more measures,” he said.
However, he admitted that government could not tame the inflation up to adequate level as he cited, “I would be the first to admit that we have not overcome all our problems. Notwithstanding the many successes under the United Progressive Alliance (UPA) government, we admit that inflation is a problem,” but he also added that inflation was also a major problem in NDA regime.
Describing the reason behind untamed inflation, FM said, “The current inflation is almost entirely due to relentless rise in crude oil prices. This rise has also triggered the rise in commodity prices and, because bio-diesel is produced from food items like maize, sugarcane and palm oil, food prices have also come under pressure. The government of India, like governments all over the world is fighting inflation.”
Opposition Attack
The major opposition party, Bhartiya Janta Party has attacked the UPA government for its failure to tame the inflation. The BJP who was the major participant in last National Democratic Alliance (NDA) government has criticised the present coalition efforts and said that the government effort to curb inflation is not sufficient to bring relief to the common men of the country.
In this response, P Chidambaram, the Finance Minister has said, “I regret to point out that the resolution is an exercise in self-deception and is aimed at spreading disinformation” and he also criticised the BJP ruling during its regime. Besides this, Chidambaram also alleged that BJP is only criticising the UPA government’s effort but did not suggest any concrete solution so far.
In this response, Ravi Shankar Prasad, the BJP spokesperson said, “We don’t need a certificate from the Finance Minister. We are only stating facts, which are stark and blunt. We are not spreading disinformation.”
‘We (BJP) have only raised the concern of common man,’ as per Prasad cited by adding, “We urge the Finance Minister to go to any market in Delhi and see for himself the rates.”
Reduction in duty on fuels
After hiking the price on petrol, diesel and LPG, the Centre has appealed to the state governments to reduce the sales taxes and other possible duties to slowdown the raised prices in these fuels.
In this concern, Orissa, Andhra Pardesh, Maharastra, Assam and other state and Union Territories have also followed the steps of some states to cut down the fuel prices.
Orissa on Friday has announced to reduce the Value Added Tax on petrol and diesel by 2 percent. Now the revised rate for petrol and diesel would be Rs. 50.82 Rs 37.25 respectively and has been come in effect from Friday midnight.
General S F Rodrigues (Retd), the UT Administrator has also announced to reduce VAT on petrol and diesel by 2 percent and slash the VAT on LPG from existing 4 percent to zero percent. The price of LPG domestic cylinder in Chandigarh would now Rs.36.50 more than UPA government’s declaration of Rs.50 per cylinder.
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