New Delhi: Under pressure to check rising prices even at the cost of some growth, the government on Thursday said it is working towards moderating food inflation to 5% while sustaining the growth momentum.
Making it clear that the current level of food inflation of 8% was ‘unacceptable’, finance minister Pranab Mukherjee said “it should be around 5 % which will be comfortable...6-7% can be tolerated”.
Replying to a debate in Lok Sabha on price rise, Mukherjee said the government had taken various steps to rein in inflation but did not outline the new strategy.
In response to various suggestions made by members during the debate, Mukherjee indicated that the government could consider doing away with subsidized diesel for passenger cars which consume 15% of the fuel.
“Growth with moderate rate of inflation... that is what we want to achieve,” Mukherjee said in nearly an hour-long reply which left NDA “disappointed” and was followed by a walk out by the BSP, SP, BJD, AIADMK and Left parties.
Through a division, the House rejected the amendment moved by CPI leader Gurudas Dasgupta which wanted a reference on the “failure” of the government to curb food inflation.
Later, it adopted by voice-vote the motion asking the government to take immediate effective steps to check inflation and provide relief to common man.
With regard to removing subsidy on diesel for cars, the Minister said, the government could “accept the suggestion and try to work out.. what mechanism could be found so that this section is not subsidized.”