With the change of guard at the Ministry of Finance, every pressure group will have its own wish list. In the din of all this the Common Person's voice will be totally drowned but this voice must be heard and what could be the wish list? First, the Common Person has no defence against inflation. The current inflation rate on a year- on- year basis is 7.8% on the Wholesale Price Index ( WPI) and 10.4% on the Consumer Price Index ( CPI) is clearly outside the RBI's comfort zone of 5% and the long- term cherished goal of a 3% inflation. All wings of policy must work relentlessly towards this objective.......
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1 comment:
An excellent article. The article should be brought to the notice of the new FM. The author has been advocating an Inflation-Indexed Bonds for many years and it is falling in deaf ears.The negative interest rate on Bank FDs debunks the claim of the Government that they stand for the small person. If I remember right, Dr. Sukumoy Chakravarty committee, appointed by Dr. Manmohan Singh when he was the Governor, RBI, had recommended what SST has said in the article, viz. that the real interest rate should be at least 3%, i.e the rate of interest offered on savings instrument should be at least 3% more than the rate of inflation.Hence, the present temporary FM should heed the advice of the Committee appointed by him at least after two decades!!
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