RBI takes timely steps to control inflation So today the situation would have been better. But he forgets his main responsibility of controlling inflation, economic growth rate, Currency Exchange Rate, It was busy in handling the interest rate etc. and arranging dividend for the government.
There is no relief from inflation at the moment. This is the message of the Wholesale Price Index (WPI) data released this week. This figure has reached 15.9%. WPI means that the cost of the producers has suffered so much inflation. So the things that will be produced now will reach the consumers in the next three-four months. And only then they will have to bear the burden of this inflation. However, why is this inflation? Is the Corona pandemic or the Ukraine war to blame? This is the perception created by the government and the media. But economist Arvind Subrahmanyam, who was the chief economic advisor to the Narendra Modi government, has challenged this notion with his logical intervention. He has told that since October 2019, the inflation rate has been higher than the inflation target of the Reserve Bank of India. Subrahmanyam argues that if the RBI had taken steps to control inflation from then on, the situation would have been better today. But RBI, forgetting its main responsibility of inflation control, kept busy in controlling the economic growth rate, currency exchange rate, interest rate and arranging dividend for the government.
Subrahmanian expressed surprise that even non-official members present in the Monetary Policy Committee did not give their independent opinion about monetary management. The former Chief Economic Adviser’s remarks are noteworthy – ‘This failure is also significant because it raises dire questions about institutional credibility and competency’. Institutions – especially an important and respected institution like the RBI – cannot remain merely an extension of the government. Subrahmanyam has rightly pointed out that control of inflation is the basis of stability of the overall economy. This is the foundation of sustained and inclusive growth. Clearly the RBI has failed in this task. He spent much of his time in the works of providing additional funds to the government in the form of dividends. Now the result is out. Due to uncontrollable inflation, the whole economy seems to be shaking. And even when this is the case, the government is busy handling the headlines.