The Finance Minister today assured the Lok Sabha that the government is committed to bring down inflation to more acceptable levels. Mr. Pranab Mukherjee added it will be between six to seven percent by the end of the March.
Making a suo moto statement in the House, he said the government is soon launching a pilot project for direct transfer of subsidies on kerosene, LPG and fertilisers to the vulnerable sections of society.
The project is being launched by using UIDAI platform to improve the delivery of benefits to this section of population. Noting that mismatch in demand and supply is one of the prime reasons of inflation, he called for improving agricultural productivity , strengthening food supply chains and augmenting capacity in the manufacturing sector is essential to keep pace with the growth in demand.
Mr. Pranab Mukherjee asserted public investments need to be increased to meet this objective. He added the State and the Central governments have a specific role to play. Mr. Mukherjee said that the Centre is addressing the policy lacunas and creating mechanisms to catalyse the required activities.
He said the States have to take effective action in agriculture extension and public investment in the sector besides providing it better marketing. The Finance Minister said that there is an urgent need to amend and enforce the Agriculture Produce Marketing Act to enable farmers to bring their products directly to the retail outlets and vice versa.
He also said there is urgent need to take steps to have unhindered flow of food and other perishable items from one region to another. Calling for accelerated Public Distribution System reforms to ensure food security for the poor, the Finance Minister said expeditious action is being taken to create storage space for centrally procured food grains.
Mr. Mukherjee expressed hope that RBI will take into account the concern of balancing the targets of controlling inflation and keeping up growth and employment generation. He said some international factors also contribute to higher inflation including the euro zone crisis and continuing inflationary trends in the international market.
