States asked to consider waiving local taxes by Prime Minister

Prime Minister Manmohan Singh has asked States to consider waiving mandi taxes, octroi and local taxes for taming inflation, which affects the poor “harder” and poses a serious threat to the country's growth momentum.

He said much of the responsibility for checking price rise lay with the States.

“Much of what needs to be done... lies in the domain of State governments... There seems to be a strong case for waiving mandi taxes, octroi and local taxes, which impede the smooth movement of essential commodities,” Dr. Singh said addressing the Chief Secretaries of States.

Emphasising the need for a paradigm shift in institutional arrangements, he pressed the States to review the functioning of the Agricultural Produce Market Committee Acts on “an urgent basis”. Underscoring the role of super stores, the Prime Minister said storage facilities have to be augmented and “supply chains need to be dovetailed with the organised retails for quicker and more efficient distribution of farm products.”

While the Indian economy is projected to grow by 8.8-9.0 per cent this fiscal, inflationary concerns are looming over the growth prospects.

However, Dr. Singh partly attributed the rise in prices of “superior food products” to rising income level and “corollary of faster growth”.

He said a lasting solution to inflation lay in increasing agricultural productivity and production not only of cereals but also pulses, oilseeds, vegetables and fruits and augmenting the supply of milk and milk products, poultry, meat and fish. He said while the Centre would provide support for checking inflation, “each State has to work out a suitable plan of action suited to its requirements and its capabilities.”

Last Update Sunday 13th February 2011     

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