How the Congress plans to curb rising prices

Expressing concern over rising prices, the Congress party on Monday asked the government to deal with the issue of inflation with candour and courage and take stern action against hoarding and black-marketing.

The draft economic resolution, proposed by Rural Development Minister C P Joshi at the 83rd plenary session of the Congress also called for achieving double digit economic expansion while avoiding jobless growth.

The foremost concern of the people is the rise in prices, it said, adding hence, it is necessary to address the issue with candour and courage.

It further said that neither the centre nor the state governments should tolerate inefficiency or corruption in the system that lead to artificial scarcity or goods or arbitrary increase in prices.

The centre should impress upon the states to deal sternly with hoarding, black-marketing and profiteering, it said, adding the inflation, as pointed out by the government, would moderate to 6 per cent by March end.

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Meanwhile, addressing the plenary session, Prime Minister Manmohan Singh said the government expected inflation to stabilise at around 5.5 per cent by March next year and the economic growth will improve to 8.5 per cent.

"Inflation remains a cause for serious concern in our country... We expect this downward trend to continue and the rate of inflation to stabilise around 5.5 per cent by next March," he said while addressing the 83rd Plenary Session of the Congress Party.

Inflation, which has become a politically sensitive issue, declined to 7.48 per cent in November from 8.58 per cent in the previous month. It was in double digits for several months till July.

Food inflation, however, rose to 9.46 per cent for the week ended December 4 from 8.69 per cent in the previous week. Pointing out that the government had taken several steps to check rising prices, the Prime Minister said, "We will continue to do so... In recent days, the rate of inflation has come down to 7.5 per cent."

Referring to economic growth, Singh said that despite the global economic crisis, the country has been able to maintain a healthy growth rate.

"In the last two quarters, our growth rate has been 8.9 per cent and we expect that for the entire year, it will be around 8.5 per cent. We also expect that from the next year onward, we will be able to grow at a rate between 9 and 10 per cent."

The Indian economy was expanding at over 9 per cent before the global financial meltdown dragged down the growth rate to 6.7 per cent in 2008-09.

Thereafter, spurred by the stimulus provided by the government and the Reserve Bank, the growth rate improved to 7.4 per cent during 2009-10. As regards the current fiscal, the economy recorded a growth rate of 8.9 per cent in the first half.

According to the Mid-Year Analysis prepared by the Finance Ministry, growth for the whole year could be 8.75 per cent, with a variation of about 0.35 per cent on either side.

While asking the government to avoid jobless growth, the resolution said, growth will be meaningful to the overwhelming majority of people, especially the youth, only if it create jobs and throws up opportunities for self- employment.

The government, it added, should keep its focus on creation of jobs as an important pillar of economic policy.

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"If the economy grows at 9 per cent and above, it will throw up abundant resources that will be adequate to fund our efforts to reach the goals (of inclusive growth)", it said. Referring to 8.9 per cent growth achieved in the first half of the current fiscal, the resolution said, the government has put in place measures that would make economy strong".

"In the long term we look forward to double digit growth and become one of the fastest growing economies in the world", it said.

The resolution also asked the government to expedite implementation of the Food Security law to provide subsidised foodgrain to people below poverty line.

Pointing out that about Rs 45 lakh crore will be required for development of infrastructure sector in the 12th Plan (2012-17), the resolution asked the government to redouble its efforts to create infrastructure sector commensurate with a fast-growing economy.

The resolution also underlined the need for formulating a comprehensive land policy to protect the interests of all stake-holders, especially the tribal communities "

It called for giving them a "share of the profits of the industries and businesses that use the land and its resources.

The amendments to the Land Acquisition Act, 1984, it said, needed to be expedited to protect the interest of project displaced persons.

On Foreign Direct Investment (FDI), it said, the Congress welcomes FDI, especially, if it is directed towards the productive sectors of the economy. Besides domestic investments, it said, FDI also has a crucial role to play in economic development.

The resolution also asked the government to remove all unnecessary obstacles to new investment and added that both public and private sector have vital roles to play in economic development.

It is necessary to unlock the true potential of our successful public sector enterprises.