Mr. Chairman, Sir, at the very outset, let me express my regrets that there is such a delay in replying to the debate on the rise in prices. But as you may recall, when Professor Das had initiated the discussion, I was expected to reply on the same day in the evening. But since a number of speakers were to make their speeches, I had my difficulty as I had to go for the meeting of the World Bank and IMF to plead the case of the developing countries. I sought the permission of the House that I might be permitted to reply to the debate on my return and, Sir, the presiding authority and the House were kind enough to permit me to reply to the debate on my return. I propose to give an elaborate reply to the various points of view which were expressed by various Members. Let me assure this House, at the very outset, that though I was not present during the speeches of some of the Members of the House, I have carefully gone through the record of the entire proceedings of this debate and I have taken note of various suggestions and the concern expressed by the Members. Let me make it clear that I do not propose to undermine and under-estimate the problem of the price behaviour of the essential commodities in the country. I also deeply appreciate the serious concern expressed by Members on both sides of the House regarding the price behaviour of various commodities. They have made concrete and constructive suggestions to check the rise in prices. I shall take note of it and also try to place before the House the viewpoint regarding various steps that are being taken. In the beginning, let me point out to the House that before the behaviour of the price manifested itself in a particular form, the House should consider the various constraints that existed while we tried to conduct and manage the economy in a specific direction. On 1st December, 1989, unfortunately the deficit was of the order of Rs. 13,800 crores and by the end of December, it was of the order of Rs. 11,800 crores. The House may recall that in the last Budget, the deficit projected was of the order of Rs. 7300 crores. There was a substantial rise. By the end of November, 1982, the foreign exchange reserves were only Rs. 5,000 crores and the balance of payments position in 1989-90 was of the order of Rs. 7,700 crores in terms of trade deficit. The inflationary rate at that time was almost 8 per cent. That is, on the annual basis under these constraints, we had to start functioning and as a result of that, certain pressures on our economy were visible right from the very beginning. Sir, I would like to refer to the post Budget situation. I cannot pass on the entire responsibility and burden on what happened in the previous Government. I must fully take up the responsibility of the post-Budget situation and I would like to place before you what were the alternatives that were available in the face of such an alarming situation when the country had to face various severe financial and economic constraints. Sir, almost all the economists, almost all the trade unionists, leaders of kisan movement all of them had warned, before the presentation of the Budget, that unless you are able to restrain the deficit to a great extent, you will not able to check the inflation in a longer range. Therefore, the first important task was to see that the deficit is restrained to as small value as possible. There were two possibilities. One softer option that was open to us was that we should not try to have much of resource mobilisation, should not try to raise taxes, should not try to have the levies even on the luxury goods, should not try to have the direct taxation in such a manner that a highly intensive capital industry might be disturbed and their wrath might be invited. Then our job would have been to see that we should not have much of resource mobilisation and, on the other hand, try to allow deficit to expand. If that had happened, no doubt there would have been greater impact as far as inflationary pressure is concerned and in the long range that inflation would have survived for a longer time and to a greater extent. The second option was harder option. It was that we should try to have resource mobilisation, try to have more mopping-up from the industrial houses, try to have additional resource mobilisation from the rich, and again try to tax the luxury goods of elite’s consumption. As that was not adequate, an unpopular task, an unpleasant task, of mopping up certain resources even from the petroleum products was taken up. Submit