Finance Minister P. Chidambaram Saturday said the government will take some “hard decisions” in the next few days to curb imports of inessential goods and contain inflation.
"We have to contain demand and practice austerity measures. Wasteful expenditure should be cut. We have to ensure that import of all inessential items are curbed," he said, replying to a debate on the appropriation bill and price rise in the Rajya Sabha.
The finance minister cited the import of high-end television sets and said it cannot be imported under personal baggage any further.
"We are going through a stressful period. We have to take some hard decisions. Many of these measures are being taken and many measures will be announced in next few days and weeks. Some measures to curb import inessential items will also be announced.“
On hiking oil prices in view of rising crude prices in the international market and rupee depreciation, Chidambaram said, "No one in the government will be happy increasing petroleum and diesel prices".
He said no decision had been taken and "no decision will be taken in haste".
Petroleum Minister M Veerappa Moily has said he would announce measures to curb fuel use this month.
The finance minister said he was concerned about the continuing high inflation.
"I am concerned about inflation. It is an unequal tax on all sections of people," he said.
Chidambaram said to address the inflation the government will now focus on supply side and distribution system of food articles.
Talking about the factors that contributed to inflation in the country, he said increase in
farm prices and wages was one of the key factors. "It will have impact on the inflation of the country. But it is a good policy to increase farm wages and prices in a country where almost 60 percent of the people depend on agriculture."
Regarding suggestions to cut taxes on petroleum products, Chidambaram said the matter could be considered provided state governments also agree to reduce the incidence of tax on oil goods.
"We can cut taxes. This 'we' is both the state government and the central government. In 2011-12 the central government collected Rs.95,349 crore as taxes on crude oil and petroleum products. All state governments put together collected Rs.105,384 crore. In 2012-13 the central government collected Rs.98,592 crore, all state governments put together collected Rs.119,314 crore."
"If taxes have to cut the central government must cut taxes along with the state governments. Let us cut some tax. But all of us should sit down together."
Replying to Communist Party of India's D. Raja's statement that the economic crisis and the depreciation of the rupee are the results of the policies pursued by the government, Chidambaram said the fall in the value of rupee to the sudden May 22 announcement of the US Federal Reserve regarding withdrawal of monetary stimulus.
He added the government will take more measures to increase flow of capital to contain volatility in forex market.
The appropriation bill was also passed by the Rajya Sabha. Earlier it was passed by the Lok Sabha. This Bill is intended to give authority to government to incur expenditure from and out of the consolidated fund of India.