Sen calls govt steps to check inflation `knee-jerk' reaction
Planning Commission member said that govt ignored early signals of rise in global commodity prices.
By PTI |
NEW DELHI: Terming the decision to reduce import duties and impose curbs on exports to check inflation as knee-jerk reaction, Planning Commission member Abhijit Sen said government ignored early signals of rise in global commodity prices.
"Some of these (steps taken by the government) were done in an extremely knee-jerk fashion," Planning Commission member Abhijit Sen said yesterday while addressing the Monday Group, a Congress-backed think-tank, which has the blessings of UPA chairperson Sonia Gandhi.
Sen, who headed the panel which studied the impact of futures trading on retail prices of essential commodities, said the government tried to check inflation by raising import duties and imposing export curbs as if the global prices would not impact the domestic economy.
Sen further added the government response was based on the presumption that inflation was going to be a temporary phenomenon and the "movement in world prices would reverse themselves".
The government in a bid to control inflation took host of fiscal measures like reducing import duty of commodities like edible oils and banning export of cereals like wheat and non-basmati rice.
Reserve Bank of India (RBI) too took series of monetary measures to check inflation that recently soared to a 13-year high level of over 11 pc.
Blaming the government for ignoring early signals when the commodity prices rose in the rest of the world, he said, "the differential in prices give speculators opportunity to cash in on arbitrage".
"Some of these (steps taken by the government) were done in an extremely knee-jerk fashion," Planning Commission member Abhijit Sen said yesterday while addressing the Monday Group, a Congress-backed think-tank, which has the blessings of UPA chairperson Sonia Gandhi.
Sen, who headed the panel which studied the impact of futures trading on retail prices of essential commodities, said the government tried to check inflation by raising import duties and imposing export curbs as if the global prices would not impact the domestic economy.
Sen further added the government response was based on the presumption that inflation was going to be a temporary phenomenon and the "movement in world prices would reverse themselves".
The government in a bid to control inflation took host of fiscal measures like reducing import duty of commodities like edible oils and banning export of cereals like wheat and non-basmati rice.
Reserve Bank of India (RBI) too took series of monetary measures to check inflation that recently soared to a 13-year high level of over 11 pc.
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Blaming the government for ignoring early signals when the commodity prices rose in the rest of the world, he said, "the differential in prices give speculators opportunity to cash in on arbitrage".
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