Action on inflation in 2 days, says Nath

New Delhi, April 8: The Union commerce and ind-ustry minister, Mr Kamal Nath, said on Tuesday that the government is considering additional steps to contain inflation and could announce them within the next couple of days.

"We are continuously discussing it. You can see some steps in the next couple of days," said Mr Nath.

With inflation rising, the government is under considerable pressure to take measures to contain it. It has already cut imports duty on crude and refined edible oil, ghee, butter and maize. It has banned export of non-basmati rice and pulses. The government also roped in steel companies to lower prices on steel products such as TMT bars.

In addition to the steps taken to curb inflation, the government can also cut indirect taxes on manufactured products, says Mr Gaurav Taneja, partner, Ernst & Young.

"Service tax comes under control of the Centre, it can further slash it for manufactured products. On sales tax it should work with the state governments to see what can be done on that front," said Mr Taneja.

He said that the government should also set up mechanism to see that the benefits are actually passed on to the consumers.

The Crisil principal economist, Mr D.K. Joshi, said that there is no short-term solution to contain inflation.

"Price controls will not be effective. The government can further reduce the excise and customs duty to bring down the prices. I would like it to reduce the excise duty on steel," said Mr Joshi.

On a long-term basis, Mr Joshi said that the government should initiate steps to increase the productivity of food grain.

Source: Asianage