India’s President A.P.J. Abdul Kalam called for an increase in supplies of factory and farm goods to meet rising consumer demand and curb inflation that’s sped to a more than two-year high.
“As growth and investment accelerate rapidly and incomes rise, there is bound to be a rising demand for all products, particularly products of day-to-day consumption,” Kalam told lawmakers today in his inaugural address at the budget session of parliament. “This rise in demand has to be met by a rise in supply.”
Record economic growth, boosted by the fastest increase in bank loans in more than three decades and higher salaries, have stoked prices of agricultural and manufactured products in India’s $854 billion economy. India’s government has banned export of wheat and pulses and the central bank has raised its key overnight lending rate five times in the past year to contain inflation.
The price rise must be contained to ensure the benefits of economic growth, which makes India among the world’s two fastest-expanding major economies, are spread far and wide, Kalam said. “My government will continue to take all necessary steps to ensure that the poor are not adversely affected by inflation.”
India’s parliament convened today for the budget session during which Finance Minister Palaniappan Chidambaram will present the federal budget for the fiscal year starting 1 April.
The government plans to introduce 34 bills in the budget session, including legislation to replace an ordinance giving the central bank freedom to lower the limits on government securities that banks need to hold, aimed at freeing up funds.