The Hindu Business Line : Inflation control

Your editorial "Haunted by inflation" (Business Line, March 8) hits the nail on the head in stating that inflation control is not the sole responsibility of the Finance Minister and the RBI. Addressing supply constraints should precede all other measures.

Farmers today keep several acres of land uncultivated as the financial returns are not commensurate with the expenses incurred for cultivation. Hence, the first step must be to ensure that farmers get remunerative prices for their products. This issue stands unaddressed in the Budget.

Other issues relate to provision of needed inputs at affordable prices including bank credit, for which, as pointed out, all ministries must work in co-ordination with each other to formulate and implement strategic policies.

State governments have a definite role to play in inflation control. State agencies must control black-marketing and hoarding. Another wrong approach that pushes up inflation is the stress on demand creation and promotion of consumption.

In recent years we have been promoting the spending of tomorrow's income today; this is not good economics. Promotion of excessive consumption is pro-inflationary.

Therefore, fine-tuning strategies with increased focus on production-led growth is a vital factor in inflation control.

K. K. Ammannaya

Udupi

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