A recent press report said that inflation which is currently prevailing high would slide down in the coming months. In spite of ardent efforts made by the Reserve Bank of India by tightening the monetary policy in order to curb the inflation, the inflation rate is above the comfort zone of the Government which is supposed to be around 5 per cent.
According to Mr. C. Rangarajan, Chairman of the Prime Minister’s Economic Advisory Council (PMEAC), inflation which is currently above the comfort zone would start to ease in the coming months due good monsoon and food grains availability would increase as yield increases.
He also added that unless otherwise the inflation comes down to acceptable levels, the Apex bank would not pause tightening the monetary policy.
Mr. Rangarajan further advocated that increasing the key interest rates sharply would help in bringing down the inflation and the responsibility of the Reserve Bank of India would become greater which is actually essential for the apex bank to act.
The RBI has hiked key interest rates to control inflation. The hike in interest rates has made retail loans such as home loan, personal loans, car loans etc expensive.