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Bharatiya Janata Party (BJP) leader Yashwant Sinha on Monday said the new government would need to rein in food inflation at the earliest and offered a solution.
The government that would be sworn in after the elections, he said, would do well to adopt the strategy that he as the finance minister of the National Democratic Alliance (NDA) government pursued in the drought year of 2002-03: Liberally release stocks of foodgrain.
The sitting Member of Parliament from Hazaribagh, who had opted to sit out the Lok Sabha elections, said food inflation could be checked by “releasing liberally the huge quantities of foodgrain that we are holding in our stocks. This is exactly what the NDA government had done in 2002-03 which was one of the worst drought years in our history.” He said as a result, the rate of inflation at the end of 2002-03 was only 3.5 per cent.
Sinha said in 2002-03 the foodgrain flood led to an “immediate depression in foodgrain prices”. “You (the next government) will have to take some more steps to get over the supply constraints for vegetables and fruit in the months of monsoon and make administrative arrangements to avoid accidents for individual commodities and then take number of measures on fiscal and supply sides to fight inflation.”
Sinha was the finance minister in the 1991 Chandra Shekhar government and also from 1998 to 2002 in the Atal Bihari Vajpayee-led NDA government.
Replying to a question, he said it would be difficult to give a time frame by when the economy would recover.
To a question whether he would occupy a key position in a possible NDA government at the Centre, Sinha demurred. “Will it be my choice? I will make my choice when I come to the bridge,” he said but added such decisions were taken by the prime minister in consultation with others. Sinha was first the finance and then the external affairs minister in the Vajpayee government.
The former finance minister disagreed that foreign investors would be wary of an NDA government that does not favour foreign direct investment in retail. “What foreign investors are looking for is ease of doing business rather than how much foreign investment we allow in which sector,” he said. It were interminable delays, Sinha said, that damaged the investment climate.
The former minister again attacked Finance Minister P Chidambaram. Sinha said he was yet to receive answers to the 18 questions on the state of the Indian economy that he asked Chidambaram on March 30. “Instead, what I received was an angry response from Chidambaram and a personal attack on me,” he said.
On Chidambaram’s criticism that Sinha was the worst finance minister of India in the post-liberalisation era, he said “Chidambaram would need to be born again” to match his performance during 1998 to 2002. Sinha reiterated his assessment that Chidambaram has indulged in “mindless” reduction of planned expenditure and “fraud” to show a deficit at 4.6 per cent in the interim Budget.
