Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: TDS :: cpt :: VAT RATES :: VAT Audit :: articles on VAT and GST in India :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment
 
 
News Headlines »
 CBDT simplifies ITR filing process from FY18
 Govt extends service tax return filing date to April 30
 No move to tax farm income, clarifies Arun Jaitley
 New board for indirect taxes to become operational from June 1
  9 changes that came into effect from April 1
 First time filing income tax? Here's all you need to know about Form 16 and Form 26AS
 New Opening Financial Controller Chartered Accountant (Manufacturing Plant) A Leading Company
 Income Tax Filing 2017: All you want to know about the single page ITR form SAHAJ
 How to benefit from investments in tax saving mutual funds
 60 per cent of income tax notices on fishy cash deposits returned
 All about income tax return form Sahaj

Inflation is a tax most damaging to the poor, says Raghuram Rajan
January, 25th 2007

The government seems dead serious about corralling inflation. It cut customs duty on a variety of products, including cement, on Monday, temporarily banned futures trade in urad and tur on Tuesday, and cut duties on edible oils on Wednesday. Reserve Bank of India governor YV Reddy will unveil his anti-inflation armoury on January 31, when he undertakes a quarterly review of monetary policy.

While the finance ministry and central bank spend sleepless nights, FE caught up with Raghuram G Rajan, the Eric J Gleacher Distinguished Service Professor of Finance at The University of Chicago Graduate Business School, who was until December the IMFs economic counsellor and director of research, for his views on sacrificing growth to contain inflation within a permissible band.

If he were the central banker, Rajan says, he would be very vigilant on inflation. The RBI cant forego the notion that growth is part of its mandate, but it has to be keenly aware that inflation tends to be a tax, which is most damaging to the poor. Not just politically very damaging, it is damaging to the country in a distributional sense too, he adds.

While Rajan says inflation is largely a monetary phenomenon, the fiscal measures taken by the government do not really surprise him. It suggests the authorities are concerned about inflation and are taking measures, he notes.

The question really is, from where does this inflation stem. If its coming from excess demand, you will have to cut back. This will imply slowing growth somewhat. In the classic view, this shows too much demand chasing too few goods.

There are ways to alleviate these pressures. Some are being tried, including opening up the import route. But there are limits since India is running a reasonably large current account deficit, he points out. At some point, there will have to be have a stark trade-off between helter-skelter growth but also high inflation and cut back on inflation at the expense of some growth, Rajan says.

You dont want to kill growth, but bring inflation within bounds. The danger of letting inflation go beyond the implicit band of 5-5.5% is it will become entrenched in peoples expectations. At 6.12%, it is already beyond the upper limit. How persistent is this and how much will lower oil prices feed in to bring it down, Rajan asks.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
System Testing Solution Manual Software Testing Solutions Automation Software Testing Solutions System Workflow Testing System Manual Testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions