The worst is over for inflation: PM

Attributing rising food prices to the drought, Prime Minister Manmohan Singh today said the worst was over and predicted that the situation would improve with the ensuing rabi (winter) crop.

"If the rabi crop ... is normal, it would surely have its impact on the situation," he said at a press conference here today.

Although overall inflation is below 1 per cent, prices of essential goods, especially vegetables like potato and onion, have risen sharply.

The prime minister, who was in Mumbai ahead of the Maharashtra Assembly elections on October 13, also ruled out any move to restrict CEO salaries, saying the issue was best left to the boards. "We still believe that the salaries are best determined by the boards of various companies and the government has no intention of imposing restrictions on CEO salaries," he said.

Explaining the context of remarks on CEO salaries he had made two years ago, Singh said, "In my address to one of the meetings of CII, I had raised the issue in a general way," adding the government has not taken any view on the issue.

The debate on the pay packets of CEOs was triggered by remarks by Corporate Affairs Minister Salman Khurshid the week before last.

He had said, "When we are working on this (austerity), we can hardly say that we (will) shut our eyes on what salary the CEOs are going to take."    

On the implementation of the Goods and Services Tax (GST), Singh said efforts were on to build consensus and introduce the new tax regime. The government is proposing to implement the GST, which will subsume various taxes like excise, service tax and octroi, with effect from April 1, 2010, a deadline that is looking increasingly unlikely owing to differences among states over several procedural issues.  Earlier, while addressing a conference of state food processing ministers, Singh had said, "The states should work towards early implementation of the GST while removing subjectivity in treatment and classification of food products."

On the possibility of another farm debt waiver scheme, the Prime Minister said, "It will not be proper."   Pointing out that the loan waiver scheme was a one-time measure, Singh said the government would try to find meaningful solutions to the problems of farmers if they continue to face problems after the debt waiver scheme was implemented.

On the Naxalite activities, Singh said the government is determined to take "effective measures" against the guerrillas but won’t use the military forces against them.  "We are not in favour of using the armed forces against the Naxalites. The para-military forces and police are adequate (for operations against Naxals)," he said.

Earlier in the day, Singh met corporate leaders and prominent people from other walks of life in an interaction aimed at propagating the Congress-led government's achievements.

To a query on several candidates, including many fielded by Congress, declaring assets of crores of rupees in their poll affidavits, Singh said, "This information is available to people. If there is any false declaration, the opportunity is available to people to challenge that."