GOVERNMENT OF INDIA
Ministry of Finance
DEPARTMENT OF ECONOMIC AFFAIRS
UNSTARRED QUESTION NO. 688
ANSWERED ON JULY 15, 2014 / ASHADHA 24, 1936 (SAKA)
High Inflation Rate
688. SHRI RAJEEV CHANDRASEKHAR:
Will the Minister of FINANCE be pleased to state;
(a) whether Government is aware that inflation continues to be alarmingly high over the last many quarters, while growth continues to drop;
(b) if so, what is the Government's roadmap for sustainable inflation moderation and details of steps Government proposes to take to get there; and
(c) what is the Government's forecast on growth and a roadmap to sustainable growth?
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SMT. NIRMALA SITHARAMAN)
(a) The headline WPI inflation was elevated in the second and third quarters of 2013-14 on account of higher inflation in food and depreciation of the exchange rate of the rupee. It moderated to 5.4 percent in the fourth quarter on account of lower inflation in vegetables (Table1).
Table 1: Headline WPI inflation and GDP growth rate (in per cent)
GDP at factor cost
(b) Union Budget 2014-15 outlines the measures to bring down inflation on a sustainable basis that inter alia include: emphasis on bringing technology driven second green revolution with focus on higher productivity and "Protein revolution" as an area of major focus; establish a Price Stabilization Fund to mitigate the risk of price volatility in the agriculture produce; to accelerate the setting up of a National Market, the Central Government will work closely with the State Governments to re-orient their respective APMC Acts., so as to provide for the establishment of private market yards/ private markets; encourage the state governments to develop farmers' markets in towns to enable the farmers to sell their produce directly; restructure FCI on priority basis and reduce transportation and distribution losses and improve efficacy of the public distribution system; develop indigenous cattle breeds and initiate a blue revolution in inland fisheries through allocations of Rs. 50 crore each for 2014-15.
(c) GDP at factor cost (at constant prices) is expected to grow in the range of 5.4 - 5.9 per cent in 2014-15 as per the Economic Survey 2013-14. Several measures have been outlined in the Union Budget 2014-15 to kick-start growth in the economy that inter alia include: fiscal consolidation with an emphasis on expenditure reforms through an 'Expenditure Management Commission'; initiatives for skill development in rural areas in the public private partnership mode to improve productivity and create employment opportunities and proposal to launch a national multi-skill programme; proposals to boost agriculture via emphasis on irrigation and long-term credit; impetus to rural infrastructure especially rural roads; emphasis on development of smart cities to promote urban development.