RBI has been doing its best to contain the inflation and inflationary expectations and also keeping in mind to ensure the growth momentum of the economy. However, the fact remains that as long as inflation in our economy is caused because of various other factors including geo political conditions, inflation linked fiscal measures like oil prices, widening inequality in the generation of wealth and incomes, having cascading effects, corruption, black money and malpractices which are predominant in the absence of effective administrative measures, the inflation control is a wishful thinking. Inflation cannot be controlled by monetary measures alone will be realised sooner than later by the authorities as inflation has already been allowed to rise its ugly face for quite some time and its perpetuation . It requires more of administrative measures and non traditional approach as the demand induced inflation come from people perhaps having sources of income other than known and declared sources. Further the fast digitisation of the economy has also perhaps increased the velocity of money circulation to cause possibly the demand induced inflation. It is time to seriously ponder to have non traditional approach along with traditional approach to contain man made inflation rather than money made inflation.
TVG Krishnan.
( a modified version of this appeared as letter to the editor in BL dated 10th June 2022).
