UPSC Syllabus Topic: GS Paper 3 –Inflation Introduction India uses inflation targeting to guide monetary policy, but recent experience shows sharp price swings and mixed results. Food inflation has shifted strongly, while repo rate changes often looked weak. As the current flexible inflation targeting framework ends in March 2026, India must reassess what has worked,… Continue reading Inflation Targeting and Beyond
Tag: Inflation
How food inflation can be managed keeping El Nino in mind
Source– The post is based on the article “How food inflation can be managed keeping El Nino in mind” published in “The Indian Express” on 17th April 2023. Syllabus: GS3- Economy Relevance– Inflation related issues News– Reserve Bank of India Monetary Policy Committee (MPC) paused the raising repo rates in its last meeting. RBI is… Continue reading How food inflation can be managed keeping El Nino in mind
Corporate power and Indian inflation
Source- The post is based on the article “Corporate power and Indian inflation” published in “The Hindu” on 13th April 2023. Syllabus: GS3- India economy Relevance– Issues related to inflation News– The former Deputy Governor of the Reserve Bank of India, Viral Acharya, is reported to have observed that unlike in the West where it… Continue reading Corporate power and Indian inflation
A flawed calculation of inflation
Synopsis: The current official inflation rate does not correctly measure price rise and it needs modification. Introduction Inflation for the last four months has been worryingly high. Wholesale price index (WPI) has been above 10% and consumer price index (CPI) crossed the 6% mark. Does the official data capture the real picture? Data issues: Unlock… Continue reading A flawed calculation of inflation
Transient easing: On inflation
Synopsis: Cutting fuel taxes is a sure-shot way to address a major component of price pressures. Introduction The latest retail inflation data suggest, that price pressures have begun to moderate in the economy, with CPI showing inflation having slowed for a second month to 5.3%, after July’s 5.59%. However, price trends among the constituents of… Continue reading Transient easing: On inflation
If inflation remains elevated, Monetary Policy Committee could lose credibility. This must be avoided
What is the news? RBI Governor has expressed optimism over the state of the economy. Speaking at an event organized by The Indian Express and the Financial Times, he noted that the economy will witness a sequential improvement in the second quarter of this year. What does the recent GDP data indicate? Recently released GDP… Continue reading If inflation remains elevated, Monetary Policy Committee could lose credibility. This must be avoided
Why Palm won’t fix India’s edible oil woes
Synopsis: India should focus on improving indigenous edible oil production rather than focusing on palm oil, that has many problems. What are the problems associated with oil palm crop? Reduces choices of farmers: Since, Palm is a long gestation crop, it reduces the responsiveness of farmers to changing market demand. For instance, farmers can switch… Continue reading Why Palm won’t fix India’s edible oil woes
A cycle of low growth, higher inflation
Source: The Hindu Synopsis: Unless policy action ensures higher demand and growth, India will continue on the path of a K-shaped recovery Background Some economists are of the opinion that the Government should not intervene with the economy and that it will revive by itself. These economists’ reason that, like after the Great Depression, the… Continue reading A cycle of low growth, higher inflation
Behest lending can give rise to a NPA problem
Source: Livemint Relevance: A lesson from the 2008 global financial crisis that can help India tackle post-pandemic situation better Synopsis: Aggressive lending to MSME sector can result in a NPA problem in the future. Background Response to 2008 financial crisis Central banks and governments across the developed world adopted extraordinary policy measures to avoid panic… Continue reading Behest lending can give rise to a NPA problem
Oil on the boil
Source: Business Standard Relevance: Understanding how global crude oil prices impact India Synopsis: India should gradually move away from an over-reliance on imports for its crude oil and gas requirements. Possible solutions. Impact of energy demand Energy prices are likely to stay elevated due to demand from a rapidly recovering global economy, even if the… Continue reading Oil on the boil
