‘Strengthen public distribution system to check inflation’

April 14th, 2008 - 11:59 pm ICT by admin  

New Delhi, April 14 (IANS) Economic experts Monday suggested the public distribution system (PDS) be strengthened as an effective measure to rein in increasing inflation, which has hit a 41-month high of 7.41 percent for the week ended March 29. They also agreed that the Reserve Bank of India might soon tighten money supply by increasing the interest rates.

Planning Commission member Abhijit Sen said improving delivery through the PDS was the most effective way to check inflation.

“Inflation is rising worldwide,” Sen said, while participating in a roundtable discussion on “Rising inflation and government’s policy responses” organised by the city-based Observer Research Foundation (ORF).

He said the inflation has nothing to do with the wheat production or prices.

Former finance secretary S. Narayan called for strong government intervention to check inflation, and explained how Pakistan and Bangladesh succeeded in checking inflationary trends through strong state interventions.

Narayan said Bangladesh had been very successful in ensuring a buffer stock of food grain, despite the disastrous cyclone, through effective monitoring and advices.

“If a country like Bangladesh can do it, why can’t we?” he asked.

Rajya Sabha member Arjun Sengupta suggested improving the country’s food grain stocks immediately through phased imports, and distributing the imported grains through the PDS to strengthen the supply side.

Jagdish Shetigar, convenor of Bharatiya Janata Party (BJP) Economic Cell, blamed the low buffer stock for the rising inflation, saying it led to hindrance in the PDS and thereby rises in prices.

B.B. Bhattacharya, vice-chancellor of the Jawaharlal Nehru University (JNU), said the demand side was creating the current bout of inflation.

“Demands are increasing from the emerging economies like India, China and Turkey which have spiked up prices worldwide. And when the prices rise globally, your cost too go up and result in high prices,” he said.

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |