Union finance minister Pranab Mukherjee on Tuesday claimed that more than $1,200 billion worth of speculative money in the US is fuelling the worldwide inflation. He said that such a whopping sum of amount is not invested in any business activities but in speculative investment in commodities.
Speaking at the Youth Congress conclave “Buniyaad”, Mr Mukherjee said that $1,200 billion worth of money is being used to “finacialisation” of commodities, foodgrains, crude oil, metals and others. He said that this sum of amount is being invested in various countries in the form of foreign institutional investment (FII) and is behind the price rise of commodities, including crude oil.
Prime Minister Manmohan Singh also speaking to the conclave later on said that the government is hopeful to bring in “reduction in inflation from March 2012”. “... we must also recognise that the phase of rapid growth that India is passing through has increased the demand for foodgrains and other commodities, resulting in mismatch between demand and supply,” said Dr Singh.
Dwelling on the economic situations, Mr Mukherjee reminded the delegates of euro zone crisis and said India is not facing such a situation as the country has alone been conservative in contrast to the European countries who are dealing with huge borrowings and high fiscal deficit. “We had estimated the international crude oil price about $90 per barrel but in the first 11 months of this year it averaged about $109, which has led to an under recovery of `1.32 lakh crore.”