Pranab for composite approach on price rise-05/08/2010

05/08/2010

Pranab for composite approach on price rise

New Delhi: Finance Minister Pranab Mukherjee on Thursday called for a composite approach to deal with the issue of rising prices as the Rajya Sabha adopted a resolution seeking the government's action to rein in the spiralling prices. Echoing his reply to the debate in the Lok Sabha on Wednesday on the issue, Mukherjee detailed in the Rajya Sabha the rationale behind the price rise.



However, the opposition parties, which had disrupted parliament's proceedings for all of last week seeking a discussion under rules entailing for voting, on Thursday expressed dissatisfaction over the finance minister's reply. Mukherjee blamed the situation on supply side hitches. "The basic problem is from the supply side" Mukherjee said, adding: "Only states can implement the Public Distribution System (PDS)."

Stating that the shortage of sugar, edible oil and pulses was one of the major hitches, he emphasised on strengthening the PDS to ensure the protection of those living below the poverty line (BPL). "We could have provided the BPL relief if our public distribution system was in place and working, but unfortunately it is not, so one of the decisions taken in the meeting of the chief ministers was to revamp the PDS," Mukherjee said, stressing that only the states can ensure effective management of the PDS.



"Central control on PDS is not possible. States will have to decentralise it to the panchayat level," the finance minister said. He also ruled out universalisation of the PDS. "If we can't implement the system, why should we venture for the universalisation?" Mukherjee asked. Defending the hike in petroleum prices, Mukherjee said it was the need of the hour as the pressure on the oil companies was escalating.

Agreeing with the opposition's contention that petrol prices had to be rationalised, the finance minister emphasised the importance of rolling out the goods and service tax (GST) regime, urging the members to push the idea with their state governments. "Some more push is needed. I request the leadership sitting here to take it up with the states and chief ministers," Mukherjee said.



Pointing out that inflation had come down to 9.53 percent this week from 9.67 percent last week, Mukherjee said that the fiscal policies of government were successful. He also announced plans of providing food grain up to 15 kg per month to families living above the poverty line at a subsidised rate of Rs.8.60 per kg. He also suggested forming a council of finance ministers, including all state finance ministers.

"I have no intention of becoming the super finance minister to interfere with the state GST," he said. Leader of Opposition Arun Jaitley, however, said that the minister's reply was not assuring. "The worries still remain. The scholarly speech has no clue, hint or assurance on when the situation will be controlled," Jaitley said.



The finance minister urged the house to support the government in bringing the GST regime. "If we receive cooperation from all concerned and introduce GST and bring within its purview petrol and other petroleum products, and with your support introduce it from April 2011, I do feel the variations in petroleum prices can be taken care of," Mukherjee contended.

"If we have to introduce GST from April 2011, an amendment bill should be introduced in this session. Only then can it can go to the standing committee and be passed in the winter session," he said.



Cutting across party lines, a number of states, including Andhra Pradesh, Gujarat, Haryana, Kerala, Madhya Pradesh and Tamil Nadu have refused to endorse a constitutional amendment on GST, arguing this impinged on their fiscal autonomy.



He, however, pleaded for more powers for the union finance minister to enable changes in the indirect tax regime from time to time that would be ratified by parliament. "The states will have the liberty to make changes in the tax structure. The passage of this bill will be the most revolutionary step in the country's tax reforms," he said.

Source: IANS