The mounting inflation in the country raises its ugly head yet again, becoming a concern for all. Interest rates have been raised by The Reserve Bank of India 8 times since March last year. Although further increase is expected, the inflation rate was 8.3% in February surpassing all expectations.
The Indian economy expanded by 8.6% this fiscal year. The after effect of a growing economy is steep rise in prices causing high inflation. According to Central Bank, the non-food manufacturing inflation, which mirrors the strength in consumer demand, rose to 6.1% February from 4.8% in January.
To add to the woes of the common man, food inflation stood at 9.5% for the week which ended on 19th March. The prices of pulses seemed to have eased but cost of fruits and protein based items still remain exorbitant.
According to market sources, the Prime minister’s economic advisory panel (PMEAC) wants the government to exploit all policy alternatives to keep a track on the fluctuating inflation and maintain it at a level of 4-5% from the present 8.31%. “We must use all our policy instruments to bring down the current inflation and re-anchor the inflationary expectations to the four-or-five-per cent comfort zone”, said C. Rangarajan, who heads the PMEAC. He also mentioned that inflation is expected to fall in the next few weeks.