Rising food prices worry Chidambaram
Expressing concern over rising food prices, finance minister P Chidambaram said he had not forgotten the corporate sector and defended the Rs 60,000 crore farm loan waiver on the ground that the money would flow to a distressed segment of the productive sector where the output was either stagnant or falling. "One of the reasons why inflation is still a threat is food prices in India,' Chidambaram said, adding that after a long gap, India has become a marginal importer of foodgrain, which is a dangerous sign. "Because we are dependent on import, we are subject to world prices... No country with as large a population as India can be dependent on imports (of foodgrain),' he said at the postbudget interactive session with industry chambers. Since April 2007, prices of wheat in the global market has risen by 88% and that of rice by 15%, he said. "Taking all this into consideration, we came to the conclusion that farmers' distress called for an unorthodox response... the response was farm loan waiver,' Chidambaram said. The wholesale price-based inflation rose to 4.89% from 4.35% in the previous week. Responding to the issues raised by the corporate sector, he said, "I have not forgotten the corporate sector. Despite the advice given by my chief economic advisor and suggestion from Economic Survey, we accepted your (corporates) demand of retaining peak customs duty rate.' He said excise duty reductions and relief given in personal income tax would help in spurring demand for consumer goods and benefit the industry. Exports grow 20.5% in January India's exports showed a healthy growth of 20.47% in January this fiscal over the same month last year, but expanded by a single digit figure of 7.66% in rupee terms due to pricey domestic currency. Exports increased to $13.14 billion in January 2008 from $10.9 billion a year ago, while imports grew by a huge 63.57% to $22.50 billion, leaving a trade deficit of $9.36 billion. PTI