No tax worse than inflation: Chidambaram

NEW DELHI: Concerned over high inflation, Union Home Minister P Chidamabaram on Wednesday expressed doubt on whether the government had all instruments to check price rise.

"Inflation is high, food inflation is very high... we are not sure whether we have all the tools in hands to control food inflation," Chidambaram said at a function organised by Skoch consultancy.

Chidambaram, who served as Finance Minister before moving to the Home Ministry in the previous UPA regime, said while there is a duty to maintain price stability yet some administrative prices have to be corrected.

His remark came in the backdrop of Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee postponing indefinitely fuel price rise on Oil Minister Murli Deora's insistence. Chidambaram said there is no tax worse than inflation. "If you have high income that is eaten by inflation," he added.

Food inflation rose to a to a 10-week high of 14.44 per cent for the week ended December 18 on the back of onion prices which rose by almost 40 per cent on an annual basis touching Rs 75-80 per kg in the retail market.

The overall inflation was 7.48 per cent for the month of November 2010. The price rise is also quite steep in case of tomatoes, green vegetables among others.