Speaking on Zee Media’s Bharat Bhagya Vidhata, Congress leader Sanjay Nirupam says India’s inflation woes are directly related to high MSP (Minimum Support Price), crude prices and hoarding activity. On poverty estimates controversy, Nirupam held the blame at the door of the Planning Commission.
Rohit Joshi/Zee Research Group
Congress MP, Sanjay Nirupam and senior journalist, Amit Goel speak at length against high inflation on Bharat Bhagya Vidhata show `Yuva Mange More` in conversation with anchors Saurabh and Anant. They suggested to increase the investments in the infrastructure projects of the country. This will also help in increasing the storage capacity which can tackle the rotten grains problem.
Admitting that the high inflation had upset the common man in the country. Nirupam said, “Yes, Inflation has risen. However, no government deliberately wants inflation to rise and people getting hurt by it.”
Recently, India’s Planning Commission released its latest report (July 2013) on poverty estimates. The report defines BPL (below poverty line) as anyone earning about Rs 27 a day or less in villages and up to Rs 32 in urban areas. Commenting on this report, Nirupam said, “We don’t agree with the planning commission report and have not accepted the report.”
Agreeing with the view that in the last 10 years, UPA has focused more on rural-centric programmes. Nirupam said, “We should bring more schemes for the urban population.”
Referring to the problem of rotten grains, Nirupam said, “It’s a matter of shame that every year, nearly 7-7.5 lakh tonnes of food grains are getting rotten owing to the lack of storage facility at Food Corporation of India (FCI) and state units. The storage capacity of Food Corporation of India is not sufficient. We are increasing the capacity but the rate of increase is less because it requires land, investments.”
The hoarding activity is done on a large scale and has also contributed to inflation. Nirupam said, “State government should take actions against hoarders. In case of Nashik, we have taken actions against hoarders but that are not sufficient.”
“Government should take quick decisions related to the export or import of commodity like onion depending upon the production levels of the commodity,” he added.
High crude oil price is another reason which has contributed to the high inflation. Nirupam said, “In the last 50-60 years, we have not focused much on the oil exploration activity. In 2004, crude oil was trading at a level of 36 dollar per barrel but today it is trading around a level of 110 dollar per barrel. In such a scenario, if one expects diesel and petrol to be sold at 2004 levels then nobody can do such a thing.”
Another major reason behind the high inflation is the increase in MSP. Nirupam asserted “One of the major reasons behind the high inflation is the increase in MSP. MSP is the minimum price at which government procure the produce from the farmers. Till 2004, MSPs of wheat and paddy were around Rs 5.5 per kg and Rs 6.5 per kg respectively. However, today the MSPs of wheat and paddy have approximately doubled to Rs 11.5 per kg and Rs 12 per kg. Therefore, market price of product is generally twice of MSP owing to the supply chain challenges.”
The main issue is that Inflation has risen significantly in India. Amit Goel, senior journalist, said, “Our economic structure has become weak. Policy Paralysis witnessed in the last two to three years is responsible for the current situation and now we are feeling the pinch of it.”
Suggesting three steps to control the inflation problem, Nirupam averred, “Production, earnings of people, proper jobs are the basic ingredients if fulfilled then inflation won’t hurt so much.”
However, Rana Kapoor, managing director and CEO of Yes Bank, opined, “There is a need to restore confidence in currency. Some conviction should be created that as and when required RBI will help to support the rupee.”
All is not doomsday. KP Singh, chairman of DLF, said, “Indian economy is in ICU. At the same time, too much negative stories are thrown out which are not correct. However, there are lots of good things happening also.”
(The episode airs at 10:00 pm on Thursday on Zee News channel.)