Central govt’s fiscal policies fanned inflation, says Tamil Nadu FM3 min read . Updated: 13 May 2022, 12:47 AM IST
At the fiscal level, you are kind of manipulating variables that are only likely to have medium-to-long term consequences, says Palanivel Thiagarajan, finance minister, Tamil Nadu
The central government’s “profoundly bad fiscal policies", including high taxes on auto fuel, and delayed monetary policy action by the Reserve Bank of India (RBI) have fanned inflation, making it hard for states to cut taxes on petrol and diesel, according to Tamil Nadu finance minister Palanivel Thiagarajan. Individual states cutting fuel taxes may create a mismatch between neighbouring states and affect tax revenues, he said in an interview.
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