The Reserve Bank of India has been raising the Bank Rates for the past few months in the hope of taming inflation.On one hand it reposes its great faith in this mechanism to control inflation on another hand its governor naively harbors doubts about the effectiveness of it and cites wage hikes,reckless government spending and supply side pressures to be responsible for raging inflation!! Do you think the latest hike would kill growth?
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Only monetary policy of RBI will not help. It is necessary to curtail wasteful expenditure, reduce consumption of petrol and diesel in the country by more economy, curbing private transport and encouraging public transport.
G. K. Ajmani Tax consultant http://gkajmani-mystraythoughts.blogspot.com/
I think the latest monetary policy reflects a kind of directionlessness on the part of the central bank of the country.Why does it pursue a policy in which it harbors such strong doubts!
