PM Manmohan Singh reiterated on Thursday his government’s resolve to fight inflation and hinted at the Budget being long on social sector spending. Singh said the Food Security Bill would be brought to Parliament in this session and underlined the need for a revamp of the public distribution system (PDS) to address supply-side constraints which are part-reason behind the high inflation.

Headline inflation stood at 8.23% in January over the year-ago period, and food inflation went up marginally to 11.49% for the week ended February 12. Singh, however, stuck to the stand that inflation would come down to 7% by March.

Replying to the motion of thanks to the President for her address, Singh said in the Lok Sabha: ?The government’s function is to ensure that we control inflation, but in a manner in which we do not hurt the growth of employment opportunities… The only way we can control inflation is through increased production and increased productivity of agriculture.?

Although the bonanza from spectrum auctions and overall tax revenue buoyancy are expected to help the government bring fiscal deficit below the budgeted level of 5.5% of gross domestic product for this fiscal, analysts doubt if the deficit would remain under 4.8% in 2011-12 as estimated. ?Our government stands committed to control inflation,? Singh told Parliament, adding that the Food Security Bill will be introduced soon.

Singh also defended his government and himself against charges of graft and other failings; in fact, more convincingly than a week ago. He addressed charges of corruption in his government one by one and challenged the Opposition to prove if more action could have been taken by any other government to address it.

?I will be the last person to deny that some unfortunate developments have taken place in the area of telecom, in the area of Commonwealth Games. These concerns are being addressed. As and when we got credible, actionable evidence of wrongdoing, action has been taken. Chief ministers have resigned, ministers have resigned, the CBI has been on the trail of wrongdoers and I assure the honourable House that there is nothing we will not do in order to clean our public life,? he said. The Prime Minister went into details of how the telecom policy was shaped and the decisions made which led to the allocation of 2G spectrum. He defended the New Telecom Policy of the NDA government in as much as it addressed a certain set of needs at a particular time. ?The way the policy was implemented was faulty but we promise to take action,? he said.

The Prime Minister also clarified his position with regard to the Antrix-Devas S-band deal, first in the Rajya Sabha and later as part of his speech in the Lok Sabha. ?I wish to clarify that no allocation of terrestrial spectrum has been made by the government; therefore, estimates of lakhs of crores of loss to the exchequer has no basis in fact,? he said.

The Prime Minister also tried to soothe fears with regard to inflation, the other big challenge being faced by the government. He assured the Lok Sabha that he expected inflation to come down to 7% by the end of this fiscal year. ?The government’s policy is to control inflation without hurting growth of employment,? he said. Referring to recent controversies over big-ticket projects being stalled due to environmental concerns, the PM tried to draw a fine line between green concerns and development. He warned that excessive regulation might lead to the ?opening up of discretion and slide back to licence-permit Raj.?In all, the Prime Minister appeared far more convincing on the floor of House than he did a week ago. A smoothly functioning Budget session seems to have restored some confidence in him and the government.