How to tame inflation has not been brought out clearly.Inflation
has robbed of the people their savings potential and its impact is
reflecting in bank deposits and living standards.The service tax and
fiscal deficit are the culprits challenging the inflation control
measures. Service tax needs to be need based and should not have
inflationary impact.For instance,service tax on tourism sector can be a
bit high compared to service tax on consumable items.Fiscal deficit can
be wiped out only through improved GDP and for that the measures have to
be totally different.Rich earning dividends in crores do not pay any
tax where as the poor earning a little for his sustenance is taxed
heavily through unbearable inflation.Fiscal deficit needs to be
contained by levying improved taxes which do not affect the
inflation.Taxes like STT needs to be identified and more of such taxes
can be the solution to bring down fiscal deficit.Budget should be
people and not market oriented.There lies the solution.
Dr.T.V.Gopalakrishnan
( This is the comment in response to Rangarajan's three poit fotmula to achieve 8-9% growth in Business line dated 4/2/13)
