OPINION

On inflation

Though the UPA Government claims that it has reduced the fuel prices to check inflation, the fact of the matter is the step has been taken with the elections to the Uttar Pradesh Assembly in mind. Since the UPA assumed power, the prices of essential items have almost doubled. Finance Minister P. Chidambaram has not taken any effective steps to contain the price rise. Instead, he is bent on introducing new taxes to burden the aam admi, particularly the salaried middle-income group. We sincerely hope he will reintroduce the standard deduction and increase the tax exemption limit to Rs.1,50,000. He should also reduce the eligibility age of senior citizens from 65 to 60.

N. Mahadevan,
Chennai

Mr. Chidambaram has pointed out that when the UPA came to power, inflation had reached over 8 per cent. Of what use are such statistics to the common man? The ground reality is that the prices of all essential commodities have skyrocketed. The reduction in fuel prices is not going to help much.

One of the main reasons for the accelerating inflation is the increase in the amount of service tax. It is also evident that the Finance Minister is contemplating a further increase in the service tax. Budgetary sops such as bringing down the age eligibility for senior citizens and marginally increasing the IT slab will hardly reduce the common man's hardship.

H. Geraldine,
Mumbai

The escalation in the prices of essential commodities is largely being driven by supply side factors. Whatever the reason, the burden of inflation mainly rests on the poor. The need of the hour is not Keynesian aggregate demand management policies but classical aggregate supply corrective measures.

K.K. Riyas,
Kannur

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