Managing inflation is biggest challenge: FM

Expressing concern over rising prices, Finance Minister Pranab Mukherjee has said managing inflation has been his biggest challenge as increasing cost of essential goods hit poor the most.

"One of my biggest challenges is to control inflation but at the same time, I should not stand in the way of higher growth trajectory. It is a difficult challenge for any finance minister", he said in an interview to India Today magazine.

The inflation for the month ended August was 8.5 per cent, while the food inflation was 16.24 per cent for week ended September 25. The Minister further said the government has been able to bring down the food inflation from 20 per cent to 16 per cent.

"I would not say I have failed. I have been able to reduce it from the peak it reached in December 2009 which it was as high as 20 per cent. Now it has been brought down to 16 per cent", he added.

However, Mukherjee said, "it is a matter of concern since inflation hits the poorer sections the most." Answering questions on focus of economic policies of Congress, he said, "Aam aadmi (common man) has always been in focus but in different forms." "When we talk inclusive growth, we talk of him when we talk of growth with equity or garibi hatao, the aam aadmi has always been at the centre but with different definitions and requirements," he added.

Referring to Goods and Services Tax (GST), Mukherjee said, "there is a broad political consensus on about the necessity of GST, about the need to remove multiple points of taxation...it may take some time but it will be possible."

Mukherjee admitted that there were reservations from some states who think that GST would deny them the autonomy of imposing tax "which they believe is their sovereign right...I don't think politics should be mixed with major economic decisions."

The centre is trying to evolve a consensus on constitutional amendments to implement GST, which will eventually subsume several indirect taxes like excise, service tax, sales tax etc.