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Home Minister: Inflation is the greatest tax of all
January, 06th 2011

The anxiety in the Congress over high inflation on Wednesday saw Home Minister P Chidambaram seeking robust measures to maintain price stability. But while doing so, the minister doubted the efficacy of current tools to contain the problem.

Inflation is high, food inflation is very high... we are not sure whether we have all the tools in hands to control food inflation, Chidambaram said at a function organised by Skoch Consultancy.

Chidambarams assertions clearly indicated a growing feeling within the Congress that the government can no longer hide behind excuses such as hoarding to explain skyrocketing prices.

Food inflation is at a 10-week high of 14.44% for the week ended December 18 on the back of onion prices, which rose by almost 40% on an annual basis. The overall inflation was 7.48% for the month of November 2010.

Chidambaram, who seemed to argue for a lets-look-the-problem-in-the-eye approach, said that inflation was the greatest tax of all. If you have high income, it is eaten by inflation, he said. At the same time, Chidambaram said that there was need for the government to correct some administrative prices. This assumes importance as a decision on fuel price is being deferred for lack of political consensus within the ruling side.

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