Government lacks instruments to tackle food inflation: Pronab Sen
By IANSFriday, January 7, 2011
KOLKATA - The government doesnt have enough instruments to tackle high food inflation in the short term, principal advisor to the Planning Commission of India Pronab Sen said here Friday.
“We have very little instruments to handle it. Using monetary policy would mean hurting growth and it would be a high price to be paid,” Sen said.
He said that the Reserve Bank of India has a headroom of 50 basis points which could help in order to normalise policy rates.
Despite several rounds of rates hikes, we are yet to go back to the level that prevailed before the global meltdown. I believe the RBI still has headroom of another 50 basis points, Sen told reporters at the sidelines of Intaglio, a programme of Indian Institute of Management-Calcutta.
YOUR VIEW POINT
