Inflation control with growth a major challenge: PM

August 15th, 2008 - 11:13 am ICT by IANS  

A file-photo of Manmohan Singh

New Delhi, Aug 15 (IANS) Prime Minister Manmohan Singh Friday said a major challenge before his government was to control inflation while ensuring that the current boom in the Indian economy, with a target of 10 percent growth, was not compromised. “For the first time in our history, we have had four years of nearly 9 percent economic growth. India is among the world’s fastest growing economies,” the prime minister said in his 42-minute Independence Day speech.

“But there are new challenges that we face. We have the challenge of inflation. I know how much each one of you is concerned about the recent rise in prices,” he said in the address to the nation from the historic Red Fort.

Describing the current trend in price rise, which has seen the annual rate of inflation climb to a 14-year high of 12.44 percent, as “imported”, the prime minister said steps were taken to ease pressures on the average citizen.

“But while making these efforts we should avoid doing anything that hurts growth,” he said. “Our economy must grow at the rate of at least 10 percent every year to get rid of poverty and generate employment for all.”

The prime minister said his government had worked hard to ensure that inflation was not as high as in many countries and taken special steps to insulate the poor from the full impact of rising food and fuel prices.

He said that while his government had kept the prices of kerosene, fertilisers, wheat and rice unchanged, the full impact of the rise in fuel prices had also not been passed on fully to consumers.

The prime minister also said that in ensuring the overall development of the Indian economy some key measures had also been taken in the past four-and-a-half years to spruce up the country’s physical infrastructure.

“There is a new dynamism in our railways. New roads are being built. Many new seaports and airports are being developed,” the prime minister said.

“Irrigation, watershed development, rain-fed areas development, flood management all received special attention. Our effort at increasing investment in the rural areas and reducing debt burden of farmers has turned our farm economy around.”

He said Rs.25,000 crore (Rs.250 billion, $6.3 billion) was given to agriculture, farm credit had jumped to Rs.225,000 crore (Rs.2,250 billion, $57 billion) and farm debt worth Rs.71,000 crore (Rs.710 billion, $17.5 billion) was waived.

Along with the revival of investment in agriculture, all this had ensured that Indian farms were green once again. “We now have had record production of food grain, cotton and sugar. Our warehouses are full again.”

Similarly, he said, realising how necessary it was to ensuring adequate employment for India’s youth, who number a staggering 550 million today, a Skill Development Mission was initiated under his supervision.

“Now, a Skill Development Corp will be created by the government with the active participation of the private sector to give special training to our young men and women, our workers and our technicians.”

Looking forward, the prime minister underlined that it was equally important to ensure that India’s rural folk did not suffer any adverse impact of industrialisation, which he said was necessary to ensure overall development and employment generation.

“We will ensure that there is reasonable compensation and proper rehabilitation. A new Rehabilitation and Resettlement Policy has been formulated. We will seek parliament’s approval for it.”

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