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Top priority is inflation: PM
BS Reporter / New Delhi Aug 16, 2010, 00:56 IST

Low agricultural output, infrastructure deficit other big concerns

Manmohan Singh Prime Minister Manmohan Singh today said taming inflation, increasing agricultural output and developing the nation’s physical infrastructure were his government’s top priorities. Addressing the nation on the 63rd anniversary of independence, Singh said he would not like to go into the detailed reasons for high inflation. “But I would certainly like to say that we are making every possible effort to tackle this problem.”

The overall inflation has been over 10 per cent for five months in a row till June, while food inflation stood at 11.40 per cent for the week ended July 31.

Singh said because remunerative prices to farmers had increased, a rise in retail prices was inevitable. He also said his government could not have continued to subsidise petroleum without hurting investments in other areas like health and education. But price control, he said, was a priority and his government was on the job.

Pointing out that the country has not witnessed any big technological breakthrough in agriculture since the Green Revolution of the 1970s, the prime minister said his government was keen to raise farm production to ensure no Indian went hungry. “We need technology which would address the need of dry land agriculture...Our agriculture should also be able to deal with new challenges like climate change, falling level of groundwater and deteriorating quality of soil.” He announced an institute was being set up in India in the name of renowned agricultural scientist Norman Borlaug, who helped usher India’s Green Revolution. The Borlaug Institute of South Asia “would facilitate availability of new and improved seeds and new technology to the farmers of India and other countries of South Asia”, Singh said.

The prime minister said there was a large deficit in India’s physical infrastructure, which was affecting the country’s economic development adversely. “There is a shortfall in the supply of electricity to industries. Our roads, ports and airports are not of world standards,” he said, adding that his government has endeavoured to involve the private sector to improve infrastructure.

Naming several initiatives taken by his government, such as the National Rural Employment Guarantee Programme, the Right to Education and two proposed Bills that will create councils for higher education and health, Singh said more new schemes were not needed. What was needed was that the existing ones were rolled out with efficiency and without corruption.

Overall, the prime minister said, there was reason to cheer. Despite a worldwide recession, the Indian economy’s performance was reasonably good. “Despite many problems, the rate of our economic growth has been better than most other countries in the world. This shows the strength of our economy,” he said.

Singh said sanitation in villages and towns was not up to desirable standards and was one reason why these areas were prone to disease outbreaks. He said the Centre, local government and the panchayats needed to work in tandem to improve the lives in rural India.

On law and order, he said violence, whatever the provocation, would not be countenanced. He asked Left-wing extremist groups to put their guns down.

He said the Planning Commission would shortly announce a scheme for the development of tribal areas. Lack of development in these areas was the main reason for the growth of left-wing extremism, he said.

On land acquired from tribals for setting up industries, the prime minister said the dispossessed must be given a stake in the development projects being undertaken. Some analysts said the prime minister’s clear backing on a take for tribals on land acquired will have implications for the ongoing amendment process to the Mines and Minerals (Regulation and Development) Act.

On Jammu and Kashmir, Singh said he regretted some young people had lost their lives. He asked the state’s young generation to have faith in Indian democracy. “I believe that India’s democracy has the generosity and flexibility to be able to address the concerns of any area or group in the country,” he said.

He also called for dignity in public discourse. “The use of harsh and unpleasant words in our political discourse has increased in recent days. This is against our traditions of generosity, humility and tolerance. Criticism has a place of its own in a democracy and in a progressive society. However, criticism should not be undignified,” he said, obviously addressing the opposition.

On the various controversies surrounding the Commonwealth Games, the prime minister said the games should be treated as a “national festival” and it was important to make it a success. He said he was sure these would be. “The successful organisation of Commonwealth Games would be another signal to the world that India is rapidly marching ahead with confidence.”

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Posted by: K.Mundanad
With reference to the statement of the PM that (we are making every possible effort to tackle the problem of inflation), it is suggested that specific rate of GST (both central and state), instead of ad valorem rate, on all essential/sensitive goods and services may be prescribed in the proposed GST legislation, so that the government(s) would not be a beneficiary of the runaway inflation, or with the result that their (centre and states) contribution to inflationary price increase would be automatically checked. If our political leaders are serious, this solution would be first implemented (i.e. before admonishing our business community not to increase prices).
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