Lok Sabha Question No. 4284 (UNSTARRED), answered on 2021-03-22
Subject: Inflation
Ministry: FINANCE
Asked by: Rajan Baburao  Vichare, Kunwar Danish Ali

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 4284

TO BE ANSWERED ON MARCH 22, 2021

## INFLATION

## 4284. SHRI RAJAN VICHARE: SHRI KUNWAR DANISH ALI:

Will the Minister of FINANCE be pleased to state:

- (a) whether inflation is increasing day by day in the country;
- (b) if  so,  the  details  of  inflation  rate  during  the  current  year and the last ten years along  with the reasons therefor;
- (c)  whether the Government has taken any steps to control the increasing inflation and if so, the details thereof;
- (d) whether the Government proposes to seek more money from the Reserve Bank of India and if so, the details thereof; and
- (e) the details of amount towards the loan of the World Bank repaid by the Government during the last one year?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

- (a)  &  (b)  Inflation  based  on  Consumer Price Index- Combined (CPI-C) has declined continuously from 7.6 per cent in October 2020 to 4.1 per cent in January, 2021, before increasing to 5.0 per cent in  February,  2021.  The  average  inflation  based  on  Consumer  Price  Index  -  Combined  (CPI-C) (beginning with base year 2012=100) is given in Table 1.
- (c)  Government  takes  various  measures  from  time  to  time  to  control  inflation  which, inter-alia , include appropriately utilizing trade and fiscal policy instruments like import  duty, minimum export price,  export  restrictions,  etc.  to  regulate  domestic  availability  and  moderate  prices;  imposition  of stock limits and advising States for effective action against hoarders and black marketers; and,

Table-1: CPI-C Inflation from 2012-13 to 2020-21(Apr-Feb)

|                 |   2012-13 |   2013-14 |   2014-15 |   2015-16 |   2016-17 |   2017-18 |   2018-19 |   2019-20 |   2020-21 (Apr-Feb) (P) |
|-----------------|-----------|-----------|-----------|-----------|-----------|-----------|-----------|-----------|-------------------------|
| CPI-C Inflation |       9.9 |       9.4 |       5.9 |       4.9 |       4.5 |       3.6 |       3.4 |       4.8 |                     6.2 |

Source: National Statistical Office (P): Provisional

provision  of  higher  minimum  support  prices  to  incentivize  farmers  for  increasing  production. Government  is  also  implementing  Schemes  which, inter-alia ,  include  Mission  for  Integrated Development of Horticulture (MIDH), National Food Security Mission (NFSM), National Mission on Oilseeds and Oil Palm (NMOOP), etc. for increasing agricultural production and productivity through appropriate  interventions.  Government  also  implements  Price  Stabilization  Fund  (PSF)  to  help moderate the volatility  in  prices  of  agri-horticultural  commodities  through  buffer  of  pulses  namely Urad, Gram, Tur, Moong, and Masoor as well as buffer of onion. The main objective of the buffer is to  release  the  stock  in  a  calibrated  manner  to  moderate  price  volatility  and  thereby  mitigate hardships to the consumer.

- (d) The surplus distribution policy of Reserve Bank of India (RBI) is determined in accordance with the  provisions  of  section  47  of  the  Reserve  Bank  of  India  Act,  1934  (RBI  Act).  The  transfer  of surplus  to  the  Government  for  the  year  2018-19,  ending  June  30,  2019,  and  the  year  2019-20, ending  June  30,  2020,  was  made  in  accordance  with  the  Economic  Capital  Framework  of  RBI formulated in terms of the provisions of section 47 of the RBI Act. For the year 2020-21, ending March 31, 2021, the amount of surplus to be transferred to the Government is usually determined in accordance with the extant Economic Capital Framework of RBI when the accounts of RBI for the accounting year 2020-21 are finalised.
- (e)  The  details  of  amount  towards  the  loan  of  the  World  Bank  repaid  by  the  Government  during 2019-20 and 2020-21 is given in Table-2:

Table-2: Principal and Interest (including commitment charges) Repayment to World Bank

(Rupees in Crores)

| Agency   | Year                      |   Repayment of Principal |   Payment of Interest charges including commitment charges |
|----------|---------------------------|--------------------------|------------------------------------------------------------|
| IDA      | 2019-20                   |                 13803.5  |                                                    1707.68 |
| IDA      | 2020-21 (upto 12.03.2021) |                 11570.3  |                                                    1786.21 |
| IBRD     | 2019-20                   |                  6688.17 |                                                    2445.63 |
| IBRD     | 2020-21 (upto 12.03.2021) |                  5767.54 |                                                    1571.28 |

Note: IDA-  International Development Association.

IBRD- International Bank for Reconstruction and Development.

Source: Controller of Aid Account & Audit Division, Department of Economic Affairs, Ministry of Finance.

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