Letters: All cylinders now

Alok Sheel (“New roles for fiscal policy”, April 27) has done well to point to the renewed emphasis on the role of fiscal policy. How can the Reserve Bank of India (RBI), for instance, work on controlling inflation if the government is going to run the kind of fiscal deficits it is running? Apart from the problem this creates in terms of excess demand, the deficit needs to be financed and RBI is also in charge of raising debt for the government. So, if it hikes interest rates to control inflation, this raises the cost of government debt. Sheel has flagged the problem, it is up to the government now.

Shreekant Jain, New Delhi

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