Controlling Inflation: B

The inflation figures do not mean anything," fumes Jaya Satish, amiddle-class housewife from Madras. "The Government should stop releasing suchabsurdities as it makes no sense either for the Government or for the voters. The solepurpose it serves is to strengthen our belief that the Government can only telllies." Our respondents seem to agree with her, as they give the finance minister a Bon controlling inflation.

And despite what it terms as its best efforts, this Government hasn’t been betterat controlling inflation than any previous regime. In fact, it may have been worse. Theaverage inflation rate over five years prior to the reform period was 8.5 per cent, lessthan in the reform years. Barring the current inflation rate of roughly 5 per cent, thepast five years have by and large witnessed double-digit inflation.

The Government’s manic pre-election attempts to rein in inflation may take a heavytoll once the general elections are over. Squeezing money supply and borrowing from themarket to make ends meet has hurt industrial growth by leaving much less money in thesystem than industry needs. Says Xerxes Desai, managing director, Titan Industries:"We keep getting these fig-ures about inflation management every day, we keep gettingdelighted every week. But I think it is largely suppressed inflation." Inflation, nowhammered down to an artificially low level, will shoot throughthe roof once the nextgovernment figures out that it must make the economy grow.

Says Ramesh: "The Government has really goofed in controlling inflation. Despite afour-year agricultural surplus, we have still seen food prices skyrocket." Perhapsthe Government should have allowed the import of sugar and edible oils, he notes. Says BJPGeneral Secretary K.N. Govindacharya: "The Government’s claim that inflation hascome down is mysterious, given the fact that prices of essential commodities continue torise."

The Government’s hollow claims are best summed up by 32-year-old Mohammad Kalim, alandless labourer working at the Badarpur Stockyard on the Delhi-Haryana border."What has changed?" he asks, baffled. "Five yearsago, I used to earnbetween Rs 30 and Rs 40 daily and now, on good days, I manage up to Rs 80. But, I stillsend the same amount home. I don’t quite understand it.