The Reserve Bank of India Governor, Raghuram Rajan, today said that there was a need to “break the back” of inflation which remains high and controlling it would make the apex bank’s position more comfortable.
“The real problem is inflation that is persistent. We have been emphasising again and again in order to break the back of inflation, we got to break this persistence,” Rajan said at the 8th Statistics Day Conference here.
He said once inflation is contained, the RBI will be in a much more comfortable position.
In August, consumer price index (CPI) or retail inflation eased to 7.8 per cent from 7.96 per cent in July, while the wholesale price index (WPI) moderated to 3.74 per cent from 5.19 per cent in July.
Noting that various economic data available in the country is not very comprehensive, Rajan pressed for an urgent need to improve them.
“We need to improve the quality and quantity and scope of our data, and we are working at it,” Rajan said.
He said India’s employment data, which forms the basis for a number of decision on monetary policies in many countries, comes with a lag and is not comparable.
“We need to work on getting a timely and comprehensive employment data base, perhaps on the monthly level,” Rajan said.
He said the RBI is working with a National Sample Survey Organisation (NSSO) to create a strong and reliable database on employment.
He also said the country does not have a proper producer price index and the RBI would soon create a series.