| Topic : Alarming Inflation Rate in India: Impact on the people !!! |
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Activity:
27 views;
last activity : 07 06 2010 20:18:09 +0000
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A combined measure from Government and RBI
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yashpal lather
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Growth and forex flows
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Remove ECONOMISTS
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I believe, inflation is a key macro economic challenge in the short term and steps taken by the government and Reserve Bank can dampen inflationary expectations. There should be a collabrative effort from Central Government, State Governments and RBI which would employ policy measures on a priority to reduce inflation, and take steps to ease domestic constraints on economic growth. |
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Government does have a big role to play under given circumstances.Inflation has been boosted by the increase in the prices of essential commodities and hence tightening of liquidity will not have much effect as the demand for these commodities are not governed by surplus cash.The rise in prices can be owed to poor show by agriculture sector but to a certain extent only.The cause is further aggravated by hoarding of these essential items. Government should act to remove such hoardings and if essential go for imports.
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At present, Reserve Bank of India's strategy of dealing with excessive liquidity through the Market Stabilization Scheme (MSS) would be good but it has its own limitations. Similarly, the increase in repo rates (ostensibly to make credit overextension costly) and increase in CRR rates (to restrict excessive money supply) are policy interventions with serious limitations in the Indian context with such huge forex inflows. |
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We have too many economists complicating simple things. Most of them are educated abroad and have no clue of ground realities. Why should India trade its food stocks when our setup is not designed for it. Do we have to learn everything from failed economies and experiment here. If at all we have to copy we should take the positive aspects of research, consistency and sincere adherence to regulator norms.
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Hi.. The sides are tough.. and realy I am clueless on which side I should be. I am not even sure that the side matches your explanation or not. I am really sorry for this. Anywasy what I think is westernization has undoubtedly brought a lot of... |
