The Hindu Business Line : Inflation

Inflation at 7.14 per cent still continues to be at three-year high. The CRR hike by the RBI ahead of its annual monetary policy is another effort to rein in inflation.

At a micro level, the common man is not benefited on the development front or relieved of the pressure of inflation. The spiralling effect of inflation has further tightened the noose around his neck. Variation in Wholesale Price Index does not signify anything for the common man as the inflationary trend is here to stay for some time. This is not a local phenomenon alone.

Given the above, we still witness uncontrolled spending on consumer goods and luxurious items. Not to demean vibrancy in this sector, a quick balance sheet on each pie earned and spent by every individual will induce prudential spending. We can expect this exercise due to improved information that can be gathered from the present-day population. Realise the consequences of an action, and its negative impact can be lessened or absorbed.

In the present context, selective control measures of the RBI alone will not help combat inflation. We should realise at this juncture that we have the best economist in our Prime Minister, Dr Manmohan Singh, and also a highly competent Finance Minister.

Therefore, it is vital not to give in to any colourful political statement by any parties. Let us leave the macro level factors to academicians and let us concentrate on how best we can manage the present crisis.

B. N. Iyer Chennai

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