Finance Minister’s Speech on Consumer Price Index

What is interesting to note is that the Hon’ble Finance Minister refers to the WPI or the wholesale Price index as a reliable, stable, more indicative price index than the Consumer Price Index. Unfortunately, the people of India do not buy wholesale. They buy in retail; retail not once over, but retail many times over when one talks of the poor, but the time a product, an essential commodity reaches the poor man, it reaches him passing many middlemen’s hands. The price has reached literally the roof.

I do not know whether it can go any higher. We were total when the Government came when the Hon’ble Finance Minister was new for all of us when the dollar was fixed at Rs. 32, that this is necessary for the purpose of handling the balance of payment situation. I am sure, the Finance Minister would agree with me, for the last four years we have actually spent a lot of money buying dollars in the market through the Reserve Bank of India to ensure that the level of the dollar at Rs. 32 per dollar is maintained.

A substantial infusion of funds has taken place. The misfortune is that the figures are not available to me. I will be obliged, Mr Chairman, if I can make a request, through you, to the Finance Minister to give us the figures on how many thousands of crores of rupees have been spent in the last years to ensure that the rupee-dollar rate stood at Rs.32.

Cost Spend On Consumer Prices

I would like to know that. I would also like to know how many million dollars have been sold off those billions bought in the last four years to somehow manage to keep between Rs. 32 and Rs 35, the rupee-dollar rate. It is obvious that when money is pumped into a market-whatever be the reason, it will add to inflation. It will not reduce or contain inflation. It is a very common theory. The more money that is available, the less the products that are available, naturally, the prices will increase and inflation will be there. I would like to have specific figures-and I am sure the House would like to know-by this one act of buying dollars and pumping money in rupees into the Indian market, how much has been the contribution to the price increase in terms of C.P.P, the Consumer Price Index and not in terms of the W.P.I. the W.P.I. can quite indicative may be for macro-economics.

My Views on the Speech

Mr Deputy Speaker, Sir, I am proud of the clean image of the Finance Minister. The economy of the country was quite weak when this Government came to power but at present, the rate of inflation has increased. The Government should accept its failure in view of the increase in the price index.

I should seek the Minister’s reply to this question with reference to Shri V.S. Rao’s statement I would like to mention that now the cost of power generation has been reduced under the Enron Project and Rs. 1000 crores profit has been proposed therefrom. I would like to know as to why sugar was not bought at the time when its price was 450 dollars per ton in the international market and the country was facing a shortage. Later on, though we have the stock of sugar was bought because its price was High.

Was there any conspiracy behind the deal? Was it a part of any plan to recover the election expenditure? I would like to know from the Government as to why sugar was not bought at a time when the price was low? Why it was imported at a higher price? I would also like to say something about another scandal which is bigger than before.

A part was awarded the contract to supply urea at a rate of 202 dollars per tone. But it has not supplied 1 lakh 60 thousand tones of urea. Then the Chairman of MMTC placed another order to supply urea at a rate of 246 dollars per tone. More than Rs. 3000 crores were involved in this scam which is a bigger amount than that before. It is directly related to economic policy. Will the economy of the country not be affected by a loss of Rs.5000crore? Hashed Mehta has also made embezzlement of Rs. 5000 crores?


Where this money has gone? The Hon’ble Finance Minister should tell where that money has gone and where it is going today? The plight of poor people is deteriorating day by day. 40 per cent population of the country is not getting anything. For whom these leaders are running the Government? Textile mills are also facing server problems. They are incurring losses.

The whole public sector is. Incurring losses because officers are involved in corruption directly. I do not want to repeat the issue raised here earlier. I seek clarification from the Hon’ble Finance Minister about MMTC

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