Right FM does not amuse Left
“One should come forward to repudiate any ideology which professes that growth indices are irrelevant,” said the FM, without mentioning Left parties, at a seminar organised by the District Congress Committee in Kannur , Kerala on Sunday.
Chidambaram pointed out that the country had achieved 8.8 per cent growth during the four-year Congress-led UPA rule, compared to 5.8 per cent in the tenure of the previous BJP-led NDA government. Economic growth close to 9 per cent would help India double its GDP over the next decade, he said.
“If we stand to remain at 3.50 per cent growth rate—that the nation could achieve during 50 years after Independence —we will continue to be poor for many more years,” the Finance Minister cautioned.
Chidambaram said Kerala's neglect of infrastructure development was what still made it trail on the development front. While states like Maharashtra and Andhra Pradesh are taking huge leaps in key areas like energy, roads, bridges and ports, Kerala continues to lag.
He said that while Gujarat and Kerala had a similar potential for developing their coasts, Gujarat had forged ahead with joint ventures to develop its ports while Kerala was unable to make use of its obvious strengths.
The UPA Government has been criticised by the Left parties for focusing too much on the GDP growth and stock market while overlooking the interest of the common man, who is suffering because of inflation.
According to Chidambaram, the current inflationary spiral was transient, and had a lot to do with “inflationary expectations” pushing up prices. “Generally, when people believe that the prices will rise, we call that an inflationary expectation. Inflationary expectation is actually worse than inflation. When people think the prices will rise, they pay more and buy more”
He was confident that prices will moderate by themselves. “The international prices will moderate. When international prices moderate, Indian prices will also moderate,” he said.
“I have brought in cuts in customs and excise duty. I have cut income tax that put more money in the pocket,” the Finance Minister said.
He also said that it was not the first time that inflation had gone beyond 7 per cent in the country. “When the UPA Government came into office, inflation was 7 per cent. We brought it down to 3.11 per cent,” he said.