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Inflation up, has Govt reached roadblock?
Published on Sat, Apr 12, 2008 at 01:51 in 
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HIGH PRICE: The inflation has hit a three and a half year high of 7.4 per cent.
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New Delhi: The inflation has hit a three and a half year high of 7.4 per cent. The measures taken by the government are proving to be futile. So has the government reached a roadblock?
That’s the latest salvo the government has fired to bring down inflation. But are these curbs working. Lets take stock of what the government has done so far.
Failed
There has been no impact in 3 major problem areas
Iron and steel prices have shot up 5.6 %
Nothing has been done to curb rising iron ore prices. On steel there have been some superficial export curbs.
Fruit and vegetable prices have shot up more than 4%- the govt has announced no measures to deal with it
Passed
The Government has done well in edible oil, where prices are down
Rice and wheat supplies are adequate but the problem is the inefficient public distribution system
What more does the government need to do? Here is a prescription from economists.
Ashok Desai says, “Government should be cutting down on useless schemes like PDS and NREGA. It should bring down its expenditure by Rs 30,000 crore and you'll see the impact on prices. Inflation will come down."
Standard Chartered Economist Sucheta Mehta says, “In fact we expect the authorities to almost use all possible tools to clam down inflation more of fiscal measures is what we expect from the authorities. We might also see a 50 bps hike in the CRR to ensure that it is under control and we do see at least in the near term some appreciation in the currency.”
But the answers mostly lie with the world economy. If prices cool off, then India will see an immediate impact -- but the left and the BJP are refusing to buy this logic.
The economic impact of inflation seems limited so far. What will be worrying the Government more is the electoral fallout.
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Ghia ar Rs 30/- a Kg ,Moong Dhuli at 45/-a Kg %26 Our Minister Kapil Sibal says we are importing
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