Tamil Nadu - Tiruchi

Slump due to rise in interest rates: Yechury

TIRUCHI: The slump in the manufacturing sector and consumer durables industry reflects economic slowdown caused by the Centre’s decision to increase interest rates on borrowings as a means to contain inflation, Sitaram Yechury MP and Member, Polit Bureau – CPI (M), cautioned on Friday.

Against the reality of 78 per cent of India making a living out of less than Rs. 20 per capita income a day, the official said inflation had been caused by the demand propelled by high liquidity in the economy indicates a “wrong diagnosis,” Mr. Yechury said, delivering an Endowment Lecture on ‘Surging Inflation – Implication and Response,’ organised by the Department of Commerce, St. Joseph’s College here.

He dismissed as excuse the argument that the rising petroleum prices were a cause of inflation. Wondering why the price of essential commodities had increased even as production was on the rise, Mr. Yechury saw a solution in banning futures trading.

It was the cause of hoarding due to which essential commodities do not reach the people.

Huge saving is possible by tapping hydel power and achieving fuller utilisation of natural gas and coal available for generating energy, instead of going in for nuclear power, and the money could be utilised for providing education and health facilities to the vast chunks of the population.

Presiding over, Rector Rev. S. Lazar said the spiralling double digit inflation has made life difficult for agricultural labourers and those in traditional skills-based occupations.

Rev. A. Pappuraj, Director, Joseph’s Institute of Management, termed inflation as a vigorous form of taxation, hurting the poor the most.

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