Modi govt responsible for high inflation, fuel price hike: Chidambaram

New Delhi, July 13 (IANS) The Congress on Tuesday attacked the Narendra Modi government over inflation and rising fuel prices and demanded immediate relief by reducing taxes on petroleum products and import duty on various items.

Addressing a press conference here, former Finance Minister P. Chidambaram said, "Inflation, even in a normal time, would be intolerable. The present is not a normal time. A pandemic is raging across the country. The pandemic has resulted in jobs being axed, unemployment rising to 8.1 per cent and incomes/wages being cut for millions of working people. In such a situation of widespread distress, inflation has broken the back of the people, and we hold the Central government under Shri Narendra Modi directly responsible for the high inflation.

"Let me caution the government, the issue of high inflation will not go away if you pretend it does not exist."

"The NDA government has continued to pretend that the concern about price rise is a false concern and, if the government ignores the issue, the issue will go away. The Congress party condemns the callous negligence of the government on the issue of price rise," he said.

He said, "The food inflation is at 5.58 per cent. Pulses inflation is at 10.01 per cent, fruits inflation is at 11.82 per cent, transport inflation is at 11.56 per cent. Fuel inflation is at 12.68 per cent, and oils & fats inflation is at 34.78 per cent.

"This inflation has not been caused by a spurt in demand. On the contrary, private consumer demand is low. This inflation has not been caused by excess liquidity or too much money in the hands of the people. This inflation has been caused by the wrong policies of the government and its inept management of the economy," said Chidambaram.

"The price of petrol in Delhi on Tuesday was Rs 100.91 per litre and that of diesel was Rs 89.88 per litre. In Mumbai, they are Rs 106.93 per litre and Rs 97.46 per litre, respectively. LPG price in Delhi is Rs 835/cylinder, in Patna it is Rs 933/cylinder. None of these prices is justified by the price of crude oil which is around USD 75 a barrel. When crude oil price was USD 125, the UPA government was able to provide petrol at Rs 65 a litre and diesel at Rs 44 a litre.

"The sole reason for the exorbitant prices is the levy of cesses by the government. Total cesses levied by the Central government on petrol and diesel are Rs 33/litre and Rs 32/litre respectively. Through these cesses alone the Central government collects approximately Rs 4.2 lakh crore every year and keeps all that money to itself. This is exploitation and greed of the worst kind," he said.

While adding that Modi's government has increased the import duties on a wide range of goods, Chidambaram said that despite a downward trend in the value of the rupee, these increased duties remain. The result is higher prices of a large number of intermediary goods as well as essential goods such as palm oil, pulses and household items, he said.

"The government continues with multiple rates of GST as well as high rates of 12 per cent or 18 per cent on an array of items including toothpaste, toiletries, processed food, other food items, home appliances, etc. GST is an indirect tax and by definition it is a regressive tax. High rates have the tendency to push up the prices of the final goods and services," he said.