Inflation will slow to 6.5% by the end of the fiscal: PM

Inflation will slow to 6.5% by the end of the fiscal: PM

New Delhi: Prime Minister Manmohan Singh expressed confidence that the current macroeconomic outlook will improve with inflation dropping to 6.5% by the end of this fiscal year, even as he put up a strong defence on behalf of his government, which has been mired in a series of corruption scandals and controversies.

“We can deal with corruption, we can deal with black money but quite frankly it is wrong for anyone to assume there is a magic wand which will lead to an instant solution of these difficult societal problems," he said.

Singh rejected criticism that he was a “lame duck" Prime Minister and said this was “clever propaganda by the opposition".

The Prime Minister also told a small group of newspaper editors in an interaction, a new exercise that will be frequently repeated with other media outlets, that he would reshuffle his cabinet very soon.

But analysts, who welcomed Singh’s interaction with the media after a long period of silence, said the Prime Minister did not commit to any specific measures or fresh initiatives to address the perception that there is a policy paralysis.

“He did not indicate any specific measures to bring in change in the scenario," said N. Bhaskara Rao, psephologist and chairman, Centre for Media Studies. “We have been hearing these promises. Nothing substantial has come out yet."

The main opposition Bharatiya Janata Party chief Nitin Gadkari said the economist-turned-politician had failed in containing inflation, which will get a fresh fillip after the recent increase in fuel and food prices. “The biggest reason for inflation is wrong economic policies and bad and corrupt government," Gadkari said.

Defending the government, Congress spokesperson Jayanthi Natarajan said: “The Prime Minister has shown very clearly that the government is purposely moving towards growth, towards ensuring the control of inflation and all the welfare that we have promised..."

According to editors present at the meeting held at his official residence at 7 Race Course Road, Singh emphasized that his was not a “puppet government" and that he had been receiving full cooperation from Congress chief Sonia Gandhi, rejecting talk that the ruling party has been distancing itself from the government.

He also tried to dispel speculation that Congress general secretary and Sonia Gandhi’s son Rahul Gandhi, widely seen as the ruling party’s future prime ministerial candidate, will replace him soon. “I don’t mind young leaders taking over...but the question has not been put on the agenda or raised by the party," Singh said, according to Kumar Ketkar, editor of Divya Marathi newspaper, who attended the session. Senior Congress leader Digvijay Singh has publicly praised the 41-year-old Gandhi’s leadership skills, triggering speculation over a possible leadership change in the government.

Singh, who, according to Ketkar, was “amazingly relaxed and extraordinarily confident throughout the session", promised a brighter picture for the Indian economy. He was quoted as saying that inflation, which touched 9.06% in May, would come down to 6.5% by March 2012.

Pointing out that the media was playing the role of “accuser, prosecutor and judge", Singh said: “If India is besieged with constant sniping between the government and the opposition, or an atmosphere of cynicism is created all around, growth impulses and entrepreneurial impulses of the people would not have full play... That worries me the most," he said.

But analysts say promises are not enough. “There has to be a systematic reform... The Prime Minister must be in a position to control the maladies in our political system and also should deliver on the promises he had given earlier," said K.C. Suri, professor in the department of political science at Central University, Hyderabad.

However, Rao added that the Prime Minister managed to convey that he was his own man. “He also tried to pre-empt the debate on a possible change of leadership or succession and his willingness to come under the Lokpal Bill— which is good."

PTI and Reuters contributed to this story.