New Delhi: Finance minister P Chidambaram, yesterday
backed the petroleum minister Mani Shankar Aiyar''s view
that state governments should help in controlling inflation
by lowering sales tax on petroleum products.
must take a second look at sales tax on crude and petroleum
products. I endorse Mani Shankar Aiyar''s appeal to the
state governments in this regard, "Chidambaram said
in his inaugural address at the economic editors'' conference
in New Delhi yesterday.
pointed out that the main reason for the inflationary
pressures were the high petroleum prices caused by the
high global prices of crude.
Chidmbaram pointed out that the centre had already gone
in for two rounds of duty cuts and would be wary of repeated
cuts. "We have reduced customs and excise duties
on petroleum twice this year and foregone revenues of
Rs4,425 crore. We have to strike a balance between giving
up revenue and funding development programmes," he
that controlling inflation would continue to be accorded
high priority, the government would intervene through
fiscal measures if it spots any "irrational price
movements," of commodities, he said. "If there
is any irrational price movements of commodities we will
watch and take fiscal measures to control it," Chidambaram
He added that controlling inflation along with tackling
the effects of delayed and deficient monsoons during the
year and turbulence in the stocks markets when the United
Progressive Alliance (UPA) government took over have been
the three major challenges for the government.
Stating that the government has taken measures to address
all these challenges, Chidambaram hoped that the economy
would grow by over 6 per cent during the current fiscal.
"On the back of last year''s 8.2
per cent growth, which was on a low base of 4 per cent
in the previous year, any growth rate of over 6 per cent
should be considered satisfactory,'''' he said.