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Opposition corners UPA on inflation

Opposition corners UPA on inflation
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First Published: Wed, Aug 03 2011. 11 09 PM IST
New Delhi: The opposition, led by the Bharatiya Janata Party (BJP), on Wednesday cornered the Congress-led United Progressive Alliance (UPA) in Parliament for its failure to contain inflation, even as the government inexplicably put up a weak defence.
In a seeming indication that the government was resigned to its circumstance, attendance was thin in the treasury benches and several senior leaders, including Congress party president and UPA chairperson Sonia Gandhi and Congress general secretary Rahul Gandhi, skipped the first day of the debate in the Lok Sabha. According to Congress party officials, Sonia Gandhi was indisposed.
Experts said that the government’s decision to virtually give up on a debate on as politically contentious an issue as inflation was unusual. The two day debate is expected to conclude on Thursday and will be followed by a vote.
“Fundamentally, the big structural problem is that the top echelons of power in the Congress party do not take ownership of what is happening in Parliament,” said Pratap Bhanu Mehta, president, Centre for Policy Research, a New Delhi-based think tank.
“This debate on price rise is important not just because it is politically significant but also because it involves the government as government, it involves a larger policy framework. But if the top echelons of the party do not show ownership, the ordinary MP (member of Parliament) is bound to be disinterested too,” Mehta added.
Leading the opposition’s aggressive charge, senior BJP leader and former finance minister Yashwant Sinha blamed the government’s policy missteps for stoking inflation. On the one hand, Sinha said, the government’s inability to contain slippage in the fiscal deficit has created a huge liquidity overhang and on the other, it was refusing to release surplus foodgrain stocks into the market to dampen prices; Sinha in fact made a case for the government to release 25 million tonnes of foodgrains into the market.
At one point of time during Sinha’s speech, less than 20 Congress MPs were present in the House. The situation did not alter dramatically when Salman Khursheed, Union law minister, offered the government’s defence.
“This is a very strange situation. Normally, when a debate begins in the House, there is good attendance for both the first speaker from the opposition and the ruling party. Gradually, as debate proceeds, attendance dwindles...Maybe, because, in this case, the motion is something everyone agrees to and there will be no division, fewer MPs were present,” said a former Lok Sabha official and an expert on parliamentary matters, who wanted to remain anonymous.
Initiating the debate on price rise, Sinha moved a motion calling upon the government to “take immediate and effective steps to check inflation that would bring relief to the common man”.
“We will not accept inflation of more than 3%,” Sinha said, adding the opposition hoped to put pressure on the government to take concrete steps.
Headline inflation for June was at 9.44% and food inflation for the week ended 16 July was 7.33%. Even as a separate debate on corruption is expected in Parliament soon, Sinha gave a prelude to what could be in store by singling it out as the single biggest reason behind price rise. According to Sinha, there has been no visible impact on prices even after 12 discussions on price rise in Parliament.
“Where is the comprehensive food pricing and management policy? It was presented over two years ago... Is the government paying any attention or just making committees for discussion?” Sinha said, adding price rise was the “worst form of taxation on poor”. Quoting a report by credit rating agency Crisil, Sinha said that rampant inflation had resulted in households spending an additional Rs 6 trillion between 2008-09 and 2010-11. And citing a report by Asian Development Bank (ADB), he said that the increase in prices over the last 20 months has resulted in 50 million more people going below the poverty line. “You have to think seriously what kind of growth do we want... If growth means inflation, we don’t want that growth,” Sinha said.
Replying to the debate, Khursheed said price rise is as much a concern for the government as it is for the opposition. “The world economy is very different today as compared to earlier. Now it is not possible to implement policies in one country which will not impact other economies,” Khursheed said.
In its defence, the government cited rising fuel prices as well as “seasonal reasons” as causes of inflation. Khursheed argued that the government had to allow its fiscal deficit to rise to prevent an increase in unemployment. “Through our job guarantee schemes, we have at least given employment,” Khursheed said, adding if prices increase with employment, it acts like a cushion.
Khursheed said the government had “implemented visionary schemes” like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the National Rural Health Mission (NRHM), the Right to Education Act, the Indira Awas Yojana and the proposed legislation on food security, among others by having “created a development model”.
Also speaking on behalf of the opposition, Sharad Yadav— convenor of the BJP-led National Democratic Alliance (NDA) and Janata Dal (United) chief, said inflation in the country was being accompanied by “jobless growth”. “This government has encouraged jobless growth by concentrating only on the growing GDP... Growing GDP figures do not produce more jobs for the common man,” Yadav said, citing data by the National Sample Survey Organization (NSSO).
ruhi.t@livemint.com
Liz Mathew, Anuja and Nidhi Misra contributed to this story.
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First Published: Wed, Aug 03 2011. 11 09 PM IST