The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:
On the Cuts in Customs Duty
The Government has cut customs duty on several items including cement, capital goods, project imports, metals and chemicals on the plea that this is required to bring down inflation, which has recently crossed the 6% mark. Little seems to be learnt from the fact that similar cuts in import duty of wheat and pulses in the recent past have not succeeded in bringing down inflation. Such drastic cuts in import duty on manufactured items would have adverse impact on domestic producers leading to deflation and unemployment. Further such cuts would adversely affect Governmental revenues, especially at a time when the country and the people expect the UPA Government to increase social sector expenditures to honor the CMP commitments. It is improper to undertake such fiscal measures just a month ahead of the Budget.
The CPI (M) reiterates that the Government should take urgent steps to check price rise of essential commodities by taking recourse to earlier suggested measures such as a ban on forward/futures trading in essential commodities, reverse its recent decision to allow export of sugar and cut the prices of petrol and diesel in view of the fall in international oil prices.