Editorial: Balancing act

Most definitely, yes. This newspaper had advocated maintaining the status quo on interest rates on the grounds that a hike would do more harm to growth than it would help control inflation. Inflation today is a truly global phenomenon and no individual government can claim to be able to control it fully. However, the recent measures by the government, comprising customs duty cuts and restrictions on exports, will probably be effective in reining in price increases in the short term. In fact, even as the monetary policy was being announced, the finance minister announced further measures in Parliament, imposing export duties on steel products and raising the duty on higher-priced cement. Even as the domestic supply scenario for these commodities responds to the new regime, there is good news on the food front by way of the forecast of a normal monsoon. These factors collectively point to an easing of inflationary pressure, though with the risk that global forces will offset all these gains