Former Reserve Bank Deputy Governor Savak Soharab Tarapore has said the “soft and calibrated monetary policy measures” taken by the central bank to tackle inflation have failed and has called for stern steps to tackle price rise, which has become a national crisis.

“There is no alternative to unequivocal and unswerving policy action to tackle inflation that has now become a major structural problem. The efforts of the RBI in controlling inflation have failed so far,” he told a function organised by research agency Dun & Bradstreet here over the weekend.

Warning that the government and RBI preoccupation with high growth at the cost of inflation will be counterproductive and disastrous, he called for “a proactive, forward-looking monetary policy and not the baby-step measures as it has been recently doing.”

Stating that the country can’t get away from the fact that inflation is all pervasive, as it has become generalised, Tarapore said, “The over 13 per cent food inflation just cannot be wished away as a supply side problem.”

“Even after a 4 percentage point slump last week, the number is intolerably high and gnaws into the vitals of large tracts of the population,” he added.

Arguing that “there is no soft monetary policy” when it comes to fighting inflation, he blasted the belief gaining currency among policymakers that it is possible to curb price rise by resorting to small, calibrated steps, thereby not hurting growth.

Related Topics
comment COMMENT NOW