INDIA RAISES TAXES FOURTH TIME THIS YEAR
The Central Bank of India has raised taxes for the fourth time this year in an effort to fight inflation. The refinancing tax, levied on all banks, has risen a quarter point to 5.75% and the reverse repo, which banks receive when they deposit their assets at the central bank, has risen a half point to 4.50%. Analysts are expecting new increases in the price of money this year. Price increases have caused the parliamentary opposition to accuse the ruling Congress Party of not protecting the buying power of the poorest members of society. In June prices in India were steady at 10.55%, well above the ceiling of 5.5% fixed by the central bank. The government foresees an increase in GDP of 8.5% for this year. However, price increases have even frightened Bollywood, the film industry, which has put out a song entitled “Mehangayi Daayan” (“The Witch of Inflation”), sung in a film produced by movie star Aamir Khan.