Consumer inflation in India is entrenched due to high food and fuel prices, and monetary policy has little impact in curbing these prices, said Finance Minister P. Chidambaram on Friday. "I have been advised that inflation has got entrenched and monetary policy does not have any or has very little impact on food prices and fuel prices,"..............
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FM is repeating what RBI and Dr Subbarao when he was RBI Governor has been telling all along. “Monetary Policy, if not supported by GOI, through Fiscal Policy measures and respect to national priorities based on country’s development needs cannot be effective.” Dr Rajan also said the same thing when he said, “I do not have any magic wand” to tame inflation. Perhaps, instead of lamenting in august fora, FM could have a dialogue on the subject with Dr Raghuram Rajan on the subject, as Dr Rajan has fresh experience of what has been happening in New Delhi on policy formulation.
M G Warrier, Thiruvananthapuram
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