Inflation fresh ammo for BJP in Karnataka polls

NEW DELHI: On Thursday, Prime Minister Manmohan Singh had warned that inflation could turn a speed-breaker for economic growth and his fears seem to be coming true with the figures released on Friday.
With the WPI-based index itself ratcheting up, Congress's task seemed cut out to manage retail prices of food items, which always sit substantially above wholesale figures.
Congress spokesperson Manish Tiwari on Friday defended the measures taken as adequate, saying, "These are figures for the week ending March 28, the CCP had met after it. The measures taken would take time to show results."
But Kapil Sibal, science and technology minister, admitted the limits of what government intervention could achieve in a scenario marked by global surge in prices. "We don't have a magic wand to control imported inflation," he told reporters.
The Left was quick to attack Congress for the statement. "This is a very callous statement. The government should have anticipated the situation and taken adequate long and short term measures," said D Raja, CPI national secretary. BJP has drawn plans to make inflation a key issue for its Karnataka campaign.
The growing worry in the government was evident when railway minister Lalu Prasad said that he had passed instructions to give priority to transportation of PDS grain over the consignments of private players.
Commerce secretary G K Pillai allayed fears of any shortage of foodgrain in the country. He said that the present tendency of rise in the prices of cereals was mainly because of the inflationary expectation due to high international prices of commodities.
He said that prices of all food articles like rice and wheat were at discount to the prevailing international prices. Therefore, there was upward pressure on the domestic prices.
According to World Bank figures, prices of agricultural commodities rose up by 73% in the international market between August 2007 and March 2008. The prices of food products rose by 88% and that of wheat by 74% and of rice by 72%. The government has taken a number of measures to improve the supply of food articles since March 29 when inflation had crossed the 5% mark.
Due to measures like scrapping of import duty on edible oils, prices in domestic market have moderated.