The Finance Minister, Mr Pranab Mukherjee, has praised the West Bengal Chief Minister, Ms Mamata Banerjee, for intervening into the market to ease supply side constraints in tackling inflation.
“Supply side constraints are a reason for high inflation.
I believe state governments ought to play a very positive and constructive role. Some states like West Bengal had played and the chief minister herself intervened, as a result supply side constraints were removed to a certain extent,” Mr Pranab Mukherjee said at a FICCI seminar here today.
The Minister said: “We are taking more lasting and positive steps. In the last two budgets, I made special provisions for the second Green Revolution for pulses and edible oil districts and this has started yielding results.”
He said that due to huge fiscal expansion, the government had to do to prevent further deceleration of growth, and this had created a pressure on inflation.
“RBI correctly thought that extra liquidity should be sucked out of the system by following a tight monetary policy,” he said.
“I am happy that headline inflation has come down from the double digit figure of 9.7 per cent to 7.47 per cent in December and I believe that it will continue till March,” he said.