oppn parties Controlling Inflation: Government Intervention Needed

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  • Allahabad HC said that the UP Police is acting as law unto themselves as they detained a person unlawfully even before his arrest
  • Kolkata witnesses traffic snarls on the first day of the Durga Puja festival as revellers start pnadal-hopping
  • Neha Bora was subsequently released and Dipke is to appear before a magistrate today at noon
  • Delhi Police detained Cockroach Janta Party founder Abhijeet Dipke, Neha Bora of AISA, student leaders and supporters ahead of a rally in Connaught Place demanding Chief Election Commissioner Gyanesh Kumar's resignation. The protest followed the detention and jailing of two CJP leaders earlier in the week over demonstrations at Jantar Mantar
  • The Reserve Bank of India is considering further monetary tightening to counter capital outflows and increase the cost of betting against the rupee, according to bankers and analysts cited by Reuters. The measures follow recent rate increases and steps to drain liquidity as pressure on the currency and inflation concerns persist
  • India directed oil marketing companies to stop diverting sugar-based feedstocks for ethanol production in the 2026–27 supply year, according to a new tender issued on Friday. The companies have invited bids for 11 billion litres of ethanol made from alternatives including corn and broken rice, amid concerns about domestic sugar supplies and prices
  • Finance Minister Nirmala Sitharaman said India's trade imbalance with China was growing sharply and attributed the problem partly to restrictions on Indian goods and services entering the Chinese market. China subsequently said it was ready to work with India to address mutual economic and trade concerns; India's trade deficit with China reached $69 billion in the first half of FY2026–27, up 27% year-on-year
  • Indian equity benchmarks extended their recovery on Friday, with the Sensex rising 413.66 points to close at 74,729.27 and the Nifty 50 gaining 148.80 points to settle at 23,146.15. Information technology shares, including Tech Mahindra, Infosys and TCS, helped lift the indices
  • India defeated Zimbabwe by four wickets in the opening women's T20 International in Raipur, taking a 1–0 lead in the three-match series. Deepti Sharma and Niki Prasad combined in an 82-run stand after India's top order collapsed, helping the hosts chase down Zimbabwe's total of 114 for five
  • Indian wrestler Komal won bronze in the women's 59 kg category at the Under-23 World Wrestling Championships in Las Vegas, defeating Kazakhstan's Viktoriia Khusainova 7–2. Fellow Indian Amruta Pujari advanced to the women's 72 kg final after recording two pinfall victories
  • Indian shuttler Jagsher Singh Khangurra secured a bronze medal at the BWF World Junior Badminton Championships in Cairo
  • The Supreme Court of India upheld the Bombay High Court's decision quashing the 2020 write-off of ₹8,415 crore in additional tier-1 bonds issued by Yes Bank (Yes Bank). The court ruled that the bank's administrator lacked the authority to extinguish the bonds under the final reconstruction scheme, strengthening bondholders' claims
  • The Supreme Court issued notices to the Election Commission of India, Delhi Police and opposition leaders, including Rahul Gandhi and Akhilesh Yadav, in separate petitions concerning electoral-roll revision and protests held in Delhi on October 10–12. The court also directed the preservation of CCTV footage linked to allegations of police excesses
  • The Supreme Court ruled that a person converting from Hinduism to Islam cannot automatically claim backward-class reservation benefits in the new religious community solely on the basis of their previous caste status. The judgment upheld the Madras High Court's decision striking down a 2024 Tamil Nadu government order that permitted such certification for specified communities
  • The Election Commission of India ordered a Special Summary Revision of electoral rolls in 14 states and three Union Territories, using January 1, 2027, as the qualifying date for voter eligibility. The draft rolls are scheduled for publication on November 12, claims and objections will be accepted until December 11, and the final rolls are due on January 4, 2027
Delhi HC refuses to ban CJP's Tiranga rally at Central Park in Connaught Place today /////// Police says will control and regulate it /////// NDMC closes the park for the public on Friday and Saturday
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Controlling Inflation: Government Intervention Needed

By Our Editorial Team
First publised on 2022-04-09 03:37:29

About the Author

Sunil Garodia The India Commentary view

The MPC meeting predictably maintained status quo on key policy rates and the accommodative stance. But with rising inflation, RBI faces a dilemma. Almost all other central banks have targeted inflation and have started, or indicated a strong willingness to start, raising rates and squeeze liquidity. In India's case, as the economy is showing signs of strong recovery despite consumer demand not going up significantly, the RBI cannot totally junk support for growth to cool prices. Further, the current inflation is not demand-pull inflation. It is cost-push inflation due to high commodity and fuel prices and disruption in supply chains. Hence, squeezing out the excess money floating in the economy is unlikely to cool prices. Also, raising rates at this juncture is going to have a negative effect on growth.

But the RBI has rightly said that it will henceforth bring inflation above growth in its list of priorities. It has also revised the inflation projections to 5.7% from 4.5% earlier. It has also said that India is likely to grow at just 7.2% in FY23 and not at 7.8% as forecast earlier. The ongoing war in Ukraine, along with the sanctions placed on Russia, is likely to cause further disruptions for supply chains and increase the price of crude and commodities and is the main cause of worry. The RBI has indicated that it will have an "eye on withdrawal of accommodation", signaling that it might raise rates going forward and also change its stance from accommodative to neutral.

But more than monetary policy, the economy now needs fiscal policy intervention by the government. With tax collections at record high (India collected Rs 27.1 lakh crore in taxes in FY22 which was 34% higher than FY21) and trends showing that this is likely to increase further, there are many options available for the government to intervene and provide relief. It must reduce Central taxes on fuel to reduce prices and prevent high transportation cost from having a spiraling effect on inflation. It must spend on infrastructure projects to give further push to growth. It must also provide DBT to the poor in cash where needed and keep on helping businesses through restructuring of loans or providing new loans. It must also crack the whip on arbitrary upward revision of prices of products in some sectors. 

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