The Hindu Business Line : Top priority to taming inflation, says PM

THE Congress-led UPA Government's "highest priority" was higher economic growth and enhanced investment with price stability, the Prime Minister, Dr Manmohan Singh, declared here on Saturday.

Speaking at the day-long meeting of the All India Congress Committee (AICC) here, Dr Singh said that the Government would give topmost priority to taming inflation, an issue that it has been fighting to control through various fiscal measures in the last few days.

The Prime Minister conceded that the sharp rise in the international prices of petroleum products and fears of an impending drought have no doubt strengthened inflationary expectations. Putting the blame on the previous regime at the Centre for "its lax monetary policy for not preparing the country for trends in international energy prices," Dr Singh, however, expressed confidence in bringing the situation under control. "Let there be no doubt on that score," he said.

Detailing — without a single word of praise for the good work — the favourable conditions that the UPA Government had inherited, Dr Singh said: "We have adequate foreign exchange reserves and our balance of payments is in surplus in the current account. We have comfortable foodstocks and the monsoon has revived well... " And then, while endeavouring to explain the reasons for the inflationary spiral, the Prime Minister said: "If, despite these favourable conditions there is some pressure on the price front it is largely on account of either international factors or a consequence of policies pursued by the previous Government with respect to the management of money supply and energy pricing."

Appearing distinctly unhappy with some of the Congress-ruled States' decision on free water and power while dwelling on the importance of "fiscal responsibility" on the part of the Centre and State governments, Dr Singh, in a strongly worded statement said, "Fiscal irresponsibility can land the country in trouble posing a threat to national security." Noting that "the country can ill-afford competitive populism", the Prime Minister urged Congress Chief Ministers to show "particular discipline in this regard, setting an example for others."

Dr Singh went on to seek a "national consensus on issues like user charges for water and power so that the country does not once again land in a economic crisis. The sharp increase in petroleum prices is a reminder that we also need to work out a long-term energy security strategy," he said.

Calling for improved tax returns from public enterprises, Dr Singh sought streamlining of the tax administration by plugging loopholes and the management of the volume and structure of public debt with "an eye on sustainability. "This is not an easy task. Hard decisions will have to be taken by governments at all levels and all political parties must understand this," he said.

The Prime Minister also announced three new missions devoted to water, urban slum renewal and rural healthcare delivery.