Inflation 'big concern' ahead of polls: finance ministry
India's inflation rate, is a "big concern" for the government as it heads towards a general election due by May 2009, Indian Finance Secretary Subba Rao said Sunday in Spain.
By Agencies |
MADRID: India's inflation rate, which jumped to a more than three-year high last month, is a "big concern" for the government as it heads towards a general election due by May 2009, Indian Finance Secretary Subba Rao said Sunday in Spain.
"I must say inflation has been a concern, inflation is a concern, in a country where about 25 per cent of the population is poor," he said at a meeting of the Asian Development Bank in Madrid.
"Of course in a pre-election year in a democracy it is a big concern but I think the government is doing everything possible to manage inflation," he added.
India's annual inflation accelerated to 7.33 percent for the week ended April 12, driven partly by higher food costs.
Rao said the Indian government spent the equivalent of about 2.0 percent of gross domestic product on subsidies for food, fertilizer and energy to help offset the impact of rising prices on the poor.
"We are hoping that as we generate growth and reduce poverty it will be possible to desubsidise but it can not be done abruptly," he said.
The government has also imposed export restrictions on some food items and duty cuts to ease price pressures.
Last week Indian Prime Minister Manmohan Singh said he was confident that the measures would show results in "the weeks and months to come."
High inflation has become a central political issue in India with taming prices the key goal of the Congress-led government, which faces a clutch of state polls before a general election in a year's time.
India's hundreds of millions of poor, whose support is vital at voting time, have been hit hardest by the inflation surge.
"I must say inflation has been a concern, inflation is a concern, in a country where about 25 per cent of the population is poor," he said at a meeting of the Asian Development Bank in Madrid.
"Of course in a pre-election year in a democracy it is a big concern but I think the government is doing everything possible to manage inflation," he added.
India's annual inflation accelerated to 7.33 percent for the week ended April 12, driven partly by higher food costs.
Rao said the Indian government spent the equivalent of about 2.0 percent of gross domestic product on subsidies for food, fertilizer and energy to help offset the impact of rising prices on the poor.
"We are hoping that as we generate growth and reduce poverty it will be possible to desubsidise but it can not be done abruptly," he said.
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The government has also imposed export restrictions on some food items and duty cuts to ease price pressures.
Last week Indian Prime Minister Manmohan Singh said he was confident that the measures would show results in "the weeks and months to come."
High inflation has become a central political issue in India with taming prices the key goal of the Congress-led government, which faces a clutch of state polls before a general election in a year's time.
India's hundreds of millions of poor, whose support is vital at voting time, have been hit hardest by the inflation surge.
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