I had a problem with my Samsung Galaxy Y that whenever I tried to connect its USB cable to my PC for data storage, the touch screen wouldn't work. I tried to find its solution on the Internet, but came out ragged.
Finally, found one solution that worked for me:
1) Remove your USB cable from PC.
2) Go to Settings --> Display --> Horizontal Calibration --> Calibrate.
Make sure to keep your Smart phone on a horizontal surface. If you have covered it with a phone cover, make sure to remove that. The surface of your phone must be connected to the horizontal surface.
Finally, found one solution that worked for me:
1) Remove your USB cable from PC.
2) Go to Settings --> Display --> Horizontal Calibration --> Calibrate.
Make sure to keep your Smart phone on a horizontal surface. If you have covered it with a phone cover, make sure to remove that. The surface of your phone must be connected to the horizontal surface.