40 Billion Bucks to Combat Rising Inflation in India

As the food and petrol prices in India do a Superman, the Central Govt is mulling over every possible measure to keep Inflation in check.

On the cards now is the Rs.4000 crore market intervention fund proposition by a committee of secretaries to the states of India. This step is supposed to augment the availability of oil, food grain and other basic items.

With the Lok Sabha elections in May 2009 and with several states heading towards elections in the recent future, this scheme is yet to obtain a green signal from the Union Ministry that comes as a move into capturing the voter’s attention.

The proposed draft clearly specifies, that all the states with more than 5 million families (including the below poverty line families) will be provided a Rs. 1.5 billion loan each i.e. Rs.150 crore.

For the states comprising of families more than a million and less than five, a hundred crore (one billion) loan would be granted and the states consisting of less than one million families will be eligible for a loan of 50 million.

The loan will be granted without interest for a repayment span of 10 years with the same repayment conditions to all states. The money will be primarily used for the procurement, storage, transportation and retail marketing of the essential commodities. The food would be made available to the economically backward for cheaper rates instead of the current spiraling rates. This move will flank the economically backward who are the worst hit by inflation.

Although this also adds up to the central govt.’s growing financial concerns.