New Delhi, June 14: As inflation surged to double digits, opposition BJP demanded that Prime Minister Manmohan Singh should rein in spiralling prices of essential commodities and talk less of achieving high GDP growth.While indications are there that the reserve Bank may raise key policy rates to check spiralling inflation which has crossed the double-digit mark.
“We have heard enough of achieving high levels of GDP growth. The Prime Minister should talk more about controlling inflation,” BJP spokesman Rajiv Pratap Rudy told .
While the government’s top economic managers today dropped strong hints that the Reserve Bank may raise key policy rates to check spiralling inflation which has crossed the double-digit mark.
Such indications were given by Planning Commission Deputy Chairman Montek Singh Ahluwalia, Chairman of Prime Minister’s Economic Advisory Council C Rangarajan and Finance Secretary Ashok Chawla.
Rudy said for a common man, the reference point was not 7-8 per cent GDP growth but rise in prices of essential commodities.
Rudy said the government is led by an “economist Prime Minister” and the country expected him to take effective steps to rein in inflation.
Driven by spiralling prices of essential items, inflation surged to double digits at 10.16 per cent in May, the highest in the last 19 months.
The essential items which have become expensive include pulses, sugar and vegetables. The prices of metal, textiles and plywood have also gone up, as inflation has spread to non-food items.
As per the provisional data, the previous high of 10.72 per cent was witnessed in the last week of October, 2008. Singh had said last month said that inflation would moderate to 5-6 per cent by December.
“It (high inflation) is always a matter of concern,”Finance Secretary Ashok Chawla said. Though the RBI is slated to review its monetary stance on July 27, it may step in earlier in view of the soaring prices, which are hurting the common man. Earlier, too, the RBI had intervened before the scheduled policy reviews and revised key short-term lending and borrowing rates. Ahluwalia too opined that “the only reason to tighten
monetary policy is that if you feel that inflation has gone too high”.
According to Rangarajan, “the picture is clear that inflationary pressures are now stronger. March figures are
revised upwards. The manufacturing sector inflation is up and is not confined to food. So, some action would be called for by the RBI in terms of policy tightening… some action on the demand-side.”
–Agencies