RBI
Governor Raghuram Rajan cannot bring inflation down. Only politics can. The
sooner politicians, policymakers and analysts realise this, the sooner we will
have realistic solutions. Inflation has three different drivers. One is the
large fiscal deficit, which creates demand for goods and services in excess of
the supply. Another is steady increase in fuel prices as part of a programme of
gradual decontrol in a context of volatile global energy prices and a weak
rupee. And the third is a steady increase in the demand for fruit and
vegetables and a range of protein foods such as lentils, milk, meat, fish and
eggs. To squeeze any of these inflation drivers, you need good politics.
Finance minister P Chidambaram has said that he would hold the deficit down below
4.8% of GDP. And his determination is clear and credible. But this is not
enough............
Read - ET
No comments:
Post a Comment