Inflation: Shashank Bhide, a member of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), said that the inflation rate has remained high for the past three quarters. The reason for this is external pressure on prices. He said that a coordinated political effort (coordinated political effort) would be needed to solve this problem. According to Bhasha news, Bhide said inflationary pressures are very high and this is definitely a test for India’s strategy to fight inflation.
Inflation rose in the second quarter
According to the news, Bhide said that there was high inflation in the second quarter of 2022-2023, before that inflation was also high in the first two quarters. High fuel and food prices and their impact on other sectors keep inflation high. Consumer price index (CPI)-based retail inflation has remained above 6% since January 2022, compared to 7.41% in September. The Monetary Policy Committee (MPC) takes retail inflation into account when deciding on the RBI’s two-month monetary policy.
need to take action
Bhide said that the reason for this situation is the damage from external prices, and steps must be taken to limit its impact on the rest of the economy. Addressing these issues will require coordinated political efforts, monetary policy, and other economic policies. He said the RBI’s tightening of monetary policy is aimed at easing inflationary pressures, as sustained inflation at higher levels has an adverse effect on consumption and investment demand.
MPC will hold a special meeting
The Monetary Policy Committee (MPC) of the Reserve Bank will hold an extraordinary meeting on November 3rd. In fact, the RBI should report to the government why it has failed to keep retail inflation below its 6% target for three straight quarters since January. The six-member MPC, led by RBI Governor Shaktikanta Das, will prepare a report explaining why the inflation target has not been met. In addition, it will also be told what measures were taken by the central bank to reduce prices in the country. Regarding the current macroeconomic situation in India, Bhide said that the risk is related to the uncertain global environment, although GDP growth in the current fiscal year is expected to be around 7 percent.