Indian Bid To Hold Prices Down

Press, Volume CVI, Issue 31151, 30 August 1966, Page 22

Indian Bid To Hold Prices Down

(N.Z.P.A.-Reuter —Cnpyright) NEW DELHI.

India has begun a struggle to hold prices down in the wake of the devaluation of the rupee. Although devaluation should affect only the price of imports, traders immediately began marking up the prices of all goods. Thus, within the first few weeks of devaluation, there was an increase in prices. Food prices, for example, rose by as much as 4 per cent in four weeks.

If this trend were to continue, the benefits of devaluation would be wiped out by inflation, and the Government is determined to see that this shall not happen. Mrs Gandhi, the Prime Minister, immediately an-

nounced a wide range of austerity measures for the Government itself. Government spending is to be reduced by 3 per cent, and capital expenditure by 5 per cent.

Government offices will stop recruiting new staff and new posts will be filled by those who have become redundant through staff economies. Ministers and officials must travel by economy class on airlines, instead of first class. To emphasise the atmosphere of austerity, ministers have also been asked to use small Indian-made cars to travel to work, instead of American limousines.

Prices of many items such as wheat, rice,, sugar and kerosene are already controlled. These items are either rationed or on sale at Government fair price shops in the main towns.