Budget 2011 will aim to enhance purchasing power: Pranab Mukherjee

NEW DELHI: Barely days ahead of presenting the Union budget, finance minister Pranab Mukherjee hinted at steps to enhance common man’s purchasing power. “If I cannot increase his purchasing power, then, he cannot afford to buy products. Therefore, this is the exercise which we shall have to take up,” Mukherjee said in the Rajya Sabha during Question Hour.

He was responding to comments by JD-U member Shivanand Tewari , who suggested that the purchasing capacity of common man should be commensurate with economic growth. “I will have to say that this is the effort which the government will have to make,” the finance minister said.

However, Mukherjee said some inflationary pressure would be there in a growing economy. “In a growing economy, it is very difficult to say that there will be no inflationary pressures... Some impact would be there.” Mukherjee said a report of a committee of chief ministers on price rise is expected soon. But states need to amend their market regulated acts to reduce the gap between the price being given to the producer and being taken from the consumer (farmgate and kitchen plate) price.

Food inflation, which hurts the common man most, is still ruling in the double digits despite some moderation in recent weeks. Mukherjee admitted that the government cannot control the prices due to other external factors but can reduce its adverse impact on people by strengthening the public distribution system.

But, he said, it is the responsibility of the policy-makers and the government to ensure that the price rise is within a manageable level. Steps are being taken both by removing the supply constraints and through monetary policy, he added.