caTch-me-iF-yoU-can, says Inflation

We should first acknowledge the fact that inflation is an India-specific problem in the sense that inflation in rest of the world is associated to housing price bubble or asset pricing bubble. Here we are not talking about any bubbles; here we are talking about real food price inflation which can only be negated when there is parity between fiscal measures and monetary policies. That man sitting in RBI has valiantly tried to tame this inflation bugbear – raising interest rates regularly. But Indian inflation is something that will respond to fiscal measures rather than monetary measures and therefore the lion’s share should be of fiscal measures and not monetary policies.

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