Tuesday, May 27, 2014

Cutting expenditure to aid inflation control

.........While the Reserve Bank of India (RBI) has been fighting its war against inflation by keeping monetary policy on a tight leash, the higher governmental spending on subsidies and administered prices of nearly 30 per cent of agricultural commodities kept on fuelling retail inflation during 2009-2014. Furthermore, the government's higher revenue deficit has raised the cost of credit and crowded out private investment, which, in turn, has worsened............

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