Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
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) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: articles on VAT and GST in India :: TDS :: cpt :: VAT Audit :: form 3cd :: due date for vat payment :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: Central Excise rule to resale the machines to a new company :: empanelment
« News Headlines »
 How to save income tax? Here are 6 investments with tax free income
 10 Top salary deductions that can save tax for you
 What are the tax saving options beyond Section 80C?
 The penalties for not paying tax on time
 How to make your salary tax efficient
 I-T Department may go into overdrive this quarter
 Ways to reduce the TDS deduction from your salary
 4 Tips for choosing who prepares your 2017 Tax Returns
 Processing of income-tax returns under section 143(1) of the Income-tax Act which were filed in Forms ITR-1 to 6 & applicability of section 143(1)(a)(vi)
 Price Waterhouse gets 2-year ban in Satyam case
 How to save income tax under section 80C

Inflation clouds Chidambaram's budget
February, 17th 2007

The Congress-led UPA Government is definitely on back foot vis--vis price rise and inflation. Feel good factor in the economy seems to be fast evapourating as the good old days of high prices and double digit interest rates have kicked in and made the matrix a wee bit complex for Dr Manmohan Singhs economic management team.

Finance Minister Palaniappan Chidambaram definitely has a tough task ahead while presenting his union budget for 2007-08 on February 28.

Political fallout aside, the steep increase in prices of most commodities and consumer goods has thrown the kitchen budgets of low income and middle class families out of gear. Finance Minister may or may not agree, but the impact is showing in more than one way.

The price rise in last few months has made life difficult and painful for vast sections of Indian society in both urban and rural areas. No amount of goading to bask under the influence of high growth rates, mega corporate deals and large foreign exchange build up touching US $ 180 billion will assuage the feelings of a large chunk of population.

Consider this: Year on Year inflation for vegetables, pulses and oilseeds has marked an increase between 24 29 percent. Milk and milk product prices have shot up by about 15 - 20 percent in last six months. Onions have become expensive by about 30 percent in last few months. Supply side constraints were pointed out by both Manmohan Singh and Chidambaram time and again as the crucial factor for rise in the prices of primary articles.

Situation is definitely grave. And, hard decisions are the call of the day for UPA to regain the dwindling confidence of people at large on Manmohan Singhs government. Politically also it makes sense for Singhs team to continue the fight against price rise with most important Uttar Pradesh scheduled to go to polls. 
But, one issue that seems to be seriously overlooked by the powers that be is the possibility of food grains hoarding by companies engaged in this business. Reserve Banks advisory to banks on this seriously evolving situation needs to be reflected upon by the Prime Minister and his economic managers.

Look at this: Retail prices of consumer and industrial goods have gone up reflecting the increase in input costs and profiteering by corporates. Services both registered and unregistered -- have become expensive as an extension of this phenomenon which some economists attribute to world trends.

Ponder over this: Boom or asset over-valuation in real estate sector combined with localized price-rise owing to the pursuance of policy on special economic zones (SEZs) has also given a feeling to those in lower and middle-income class that nothing comes cheap. One needs to seriously think as to whether increasing the cost of funds to burst the asset bubble is the right anti-dote. This is the classic case of allowing the disease to spread and then resort to emergency surgery to take the malignant portion out.

The increase in Cash Reserve Ratio (CRR) was yet another move to suck excess liquidity worth Rs 14,000 crore and prevent further damage in the form of higher inflationary expectations.

While impact of price rise world wide is not to be discounted, it is only one single factor that has bearing back home.

For instance, the duty cuts announced last month on a clutch of products should have reflected in the prices of both cement and other capital goods. This is yet to happen. Belated ban on wheat and milk products exports is yet to show up.

There are reports to the effect that Finance Minister P Chidambaram may bring down the customs duties across the board by 5 percent to South East Asian levels a year earlier to make industrial inputs cheaper and douse the flames of inflation rocking the UPA boat. Cement, paper and metals seem to be on his radar.

In mid-90s, it was Dr Manmohan Singh who led the P V Narasimha Raos team to fight inflation. And, it is his skills and tools that are being put to test right now on fight against price rise while ensuring the economic growth momentum. China is a singular case where the double digit growth coupled with minimal inflation has been consistently reported. It is a case in study for our own policymakers and those making the budget.

Situation is definitely grave. And, hard decisions are the call of the day for UPA to regain the dwindling confidence of people at large on Manmohan Singhs government. Politically also it makes sense for Singhs team to continue the fight against price rise with most important Uttar Pradesh scheduled to go to polls.


Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Development Software Programming Software Engineering Custom Software Development Requirement Based Software Development Software Solutions Software Serv

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