NEW DELHI: Putting a brave face on inflation numbers, Finance Minister P Chidambaram has said rising prices will not have much of an adverse impact on the UPA government.
"We are doing everything to control the situation, but I don't think it (price rise) will have too adverse an impact on our government," he said in an interview with a magazine.
Chidambaram said while the average inflation in the 70s and 80s was well over eight per cent, the tolerance level of price rise has come down drastically. "Since the turn of this century, I think tolerance level of inflation is only four to five per cent," he said, adding "the moment the figure goes beyond five per cent, there is resentment.
"Naturally political parties seize the opportunity to feed this resentment," Chidambaram said.
Despite a slew of administrative and fiscal measures like ban on export of cement, wheat and non-Basmati rice and scrapping of customs duty on a host of edible items, inflation has crossed eight per cent, giving a handle to the opposition parties in an election year. The boiling crude oil prices around 135 dollars a barrel has added to the problem.
Critical of the delays in sanctioning of the big-time projects which could have resulted in a huge capacity build-up, Chidambaram said people in poor states were being "deceived" to believe that the existing state of life is an ideal state of life.
"Here we talk about steel prices going up, but for three years we have stopped the world's largest steel producer from producing steel in India. This could be categorised as a conspiracy of the socially-driven class to keep poor people poor," he said
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