Apropos of the column “Let’s kill GDP, inflation will fall” (FE, October 15), for months now inflation has been looming as the greater threat on this government than slowing growth. RBI interventions on checking money supply as a tool to rein in inflation have elevated the borrowing costs. A combination of relentless global economic stasis coupled with adamant inflation at home have elevated input costs. Fiscal considerations are not allowing fuel prices to be toned down either. This does not augur well for industrial growth. The added worry is that a weak industrial sector performance is now being followed by weak services sector performance. The one brighter spot is that the agriculture sector has improved in FY2011. But tardiness in agri-market reforms will not allow the gains of this sector being transmitted to the consumer. And food inflation has remained the Achilles’ heel for close to two years now. So, we should now focus on effective governance and push for reforms, which have been put on the back burner. The route to rate interventions will not take us out of the current crisis as would energetic pursuit of reforms.
R Narayanan, Ghaziabad (FE)
