Thursday, January 16, 2014

Virtues of waiting

This refers to the editorial "Still no room for " (January 16). It is a great relief to know that consumer dropped from 11.2 per cent to 9.9 per cent, while wholesale inflation declined from 7.5 per cent to 6.2 per cent. But the question that lingers in the minds of policymakers is how far these figures are sustainable, especially in the background of persisting political instability, laxity in the pursuit of , declining trend in industrial production and uncertainty over the extension of adequate support for agricultural production. The Reserve Bank of India cannot take policy decisions merely based on the current trend - as it did in its last policy review. It would be better to wait for some more future trends in the inflation index. 

T.V.Gopalakrishnan Bangalore
(This letter appeared in Business Standard dated 17/1/2014).

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