Under attack for surging prices particularly of food items, the government today said it expects good rains to help halve inflation to six per cent by December.

We expect to see the rate of inflation in wholesale prices to come down to around 6 per cent by December,’ Prime Minister Manmohan Singh said in his opening remarks at the meeting of the National Development Council, being attended by several Central Ministers and most of the Chief Ministers.

His remarks come ahead of the monsoon session of Parliament, which is expected to be stormy over issues including price rise.
He said the government has taken a number of steps to curb price rise. ‘With normal monsoon, which is the expectation at present, the rate of inflation in food prices will abate in the second half of the year,’ Manmohan said.

Monsoon accounts for around 80 per cent of rains India receives and nearly 60 per cent of the cultivated land is rain-fed. Two years of poor rains had led to an upward spiral in food prices, the effect of which spread to manufactured goods.

‘This is lower than the target of nine per cent, but still the highest achieved in any plan period,’ he said. India’s economic growth slowed down during 2008-09 to 6.7 per cent from over nine per cent since 2005-06 due to the global financial crisis.

However, stimulus packages to boost demand pushed it up to 7.4 per cent last fiscal. Economic growth is expected to be 8.5 per cent this fiscal. On tax reforms, the Prime Minister appealed to Chief Ministers to extend their support to the Goods and Services Tax (GST), which the government wants to implement from the next fiscal.

Since the introduction of GST would require constitutional amendments and ratification by at least half of State Assemblies, the support of Chief Ministers, particularly NDA-ruled States is crucial for radical reforms. Seeking the cooperation of States in dealing with Left-wing extremism, the Prime Minister asked the Planning Commission to design a holistic development programme for Naxal-affected areas.

He said the development programmes must be aligned with the special circumstances in these States. ‘I have asked the Planning Commission to design a holistic development programme for these areas in consultation with states and other stakeholders,’ he said.

Manmohan said there should be no doubt that Left-wing extremism has to be met and it will be met with Centre and the States cooperating fully with one another. However, he said, the action against Maoists has to be supplemented by action on two other fronts — implementation of Forest Rights Act and Panchayati Raj and providing additional resources to these development of these areas.

‘Our development schemes have not worked well in these backward and impoverished parts of our country, especially in the areas inhabited by the adivasi population.

 

We must make a concerted effort to bridge the development deficit in these backward areas and reduce whatever sense of alienation that may exist among the adivasis living in these areas,’ he said. He said the rights of tribals to forest must be protected.

Pointing out that the Centre’s flagship programmes like MGNREGA was doing well in many states but there are ‘examples of poor implementation’ as well, Manmohan said there was a need to make sustained efforts to improve performance in States where it is below average.

Manmohan also said that initiatives like Right to Education and NRHM need to be implemented with vigour. ‘This will require more resources. However, it is equally important to pay attention to improving the delivery system in order to achieve the desired outputs,’ he said.

The Prime Minister also laid stress on the need to protect environment which is under the threat from various sources of pollution.