On 7% + Inflation

i had written about the inflation problem, the nation is facing as WPI inflation rate has doubled in the past 3 months and food prices in cities are up 40% in metros. Looks like Raghuram Rajan committee report is out, and advocating the obvious and logical way to go about managing monetary policy, but will the Rbi take the bait, that too when policy is as much or more so stirred by political considerations than economic, and the govt still is the biggest borrower in the debt market.

Update : As expected inflation is now above 7% from 6.8% . BBC says tha the rice prices will keep on rising , a reflection of hoarding mentality of nations as prices climb up, and  a third of food in the Indian PDS scheme is lost to theft and damage due to poor stocking .

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2 thoughts on “On 7% + Inflation

  1. I read today that small traders are having a field day. They have started hoarding grains, potatoes and onions and this is pushing the prices up further. Thank God for the malls.

  2. well most bhaji markets are controlled by small and medium traders , just go to the market at 9pm and see how much they prefer to waste/throw away to control prices !!
    And being small they cannot be coerced by the govt using threat ,not unexpected when the nafed boss is the biggest onion trader in his area.

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