The Hindu Business Line : Chidambaram stresses on self-sufficiency

The Union Finance Minister, Mr P. Chidambaram, on Friday underscored the need to augment production and productivity in wheat, rice, edible oil and pulses, stating that the rise in the prices of imported primary food articles was driving inflation here.

He contended that the country could insulate itself against the rise in their international prices by becoming self-sufficient in these commodities. The Finance Minister noted that it would not be easy to tame inflation as long as India was dependent on imports of such essential items.

“We are not insulated from global commodity prices. Self-sufficiency is the key to insulate ourselves from high global commodity prices”, Mr Chidambaram said in Lok Sabha in reply to a supplementary during the question hour.

The country’s headline inflation rate for the week ended March 1 rose to 5.11 per cent from 5.02 per cent a week ago, official data released here on Friday said.

The Finance Minister said that both domestic and international factors have contributed to the rise in inflation from a low of 3.11 per cent to nearly 5 per cent now.

New index

“Inflation is on the rise. It is a matter that causes worry to any Government. When inflation is on the rise, all of us should be concerned,” Mr Chidambaram said, adding that a new index was being prepared to measure inflation accurately and to reflect the changing consumption pattern among people.

The Finance Minister said that the Government was ready to take any fiscal steps to keep inflation under check. On interest rates, Mr Chidambaram said that interest rate was one of the effective steps to contain inflation. “There is scope to reduce interest rate… We must trust the Reserve Bank of India to use the interest rate as an instrument to contain inflation”, Mr Chidambaram said.

Food mission

The Government had launched a Krishi Vikas Yojana and National Food Mission with an aim of making the country self-sufficient in essential commodities like rice, wheat and pulses. Through these programmes, the production of rice was expected to grow to 10 million tonnes in the next three to four years, that of wheat to eight million tonnes and that of pulses to two million tonnes.

On the international factors behind inflation, he said the price of crude oil had gone up from $37 a barrel in 2004 to $110 now, cost of palm oil has increased from $471 per tonne in 2004 to $1,177 dollars per tonne in February 2008 and the cost of Thailand rice has gone up from $225 dollars per tonne in 2004 to $510 dollars per tonne now.

Responding to a question in a written reply, the Finance Minister said that the Government accords “topmost priority to controlling inflation”.

The anti-inflationary policies of the Government include fiscal discipline, rationalisation of duties, effective supply-demand management of essential commodities.

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