NEWS

Govt must help common man, Pranab says ahead of Budget

Tuesday February 22, 2011 08:26 pm PST

Amid expectations of some relief for the common man in the Budget, Finance Minister
Pranab Mukherjee today said his government will have to take steps to increase his
purchasing power.

"I will have to say that this is the effort which the Government will have to make,"
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.

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," he said.

At the same time, from the consumer''s point of view, "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." In the run-up to the Budget to be presented on February 28, there
is an expectation that the Finance Minister could increase the exemption limits of income
tax from the existing Rs 1.6 lakh per annum for men and Rs 1.9 lakh for women.

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 the recent weeks.

However, Mukherjee, admitted the government cannot control the prices because of other
external factors but can reduce its adverse impact on people by strengthening the public
distribution system.

"If we increase the purchasing power of the people, which we should, and if we give
more to the producers, to the farmers, which we shall have to give, some amount of
inflation would (still) be there.
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 constraint and by fixing the appropriate monetary policy, he added.