Leading to higher InflationThe budget 2010 is really good for some people like farmers and middle class people. Mr. Pranab has increased the income tax slabs instead of increasing the minimum exemption limit as it was Rs.1,60,000 in the last year. The amount of Rs.1,60,000 would have been increased to at least Rs.2,50,000 as the income level of common man is increased. Two things I wish to say here, 1) Extending the waiving of farmers loan seems eyeing on election, but the negative impact leads to higher inflation as the availability of cash liquidity will be widened. 2) Inflation for the month February crossed already 8%, if further petrol price and excise duty is increased, then rest of the dependent commodities price will also increase. Of course it is inevitable to increase the petrol price as the oil companies are incurring loss on this front, but he would have generated the other revenue sources to compensate this corner. Once the inflation starts increasing the RBI intervenes to control the inflation by increasing the bank rates, so it impacts the whole economy adversely. Ultimately the budget 2010 is burden on poor people who are already suffering the price heat.
Prof. Shrinivas R. Patil
Professor of Finance
KLES’s IMSR
Hubli (Karnataka)
Email id: shriji.patil@gmail.com
Cell No: 9900409419
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