Letters: Inflation and RBI's role

This refers to the edit “No pain, no gain” (July 27). Your call for the central bank and the government to put their heads together to contain inflation is timely. The Reserve Bank of India (RBI) has been very active in changing monetary policy, but the government’s dormant role is quite regrettable. RBI has, for the first time, warned the central government about the absence of complementary measures — supply-side management and corrective fiscal policy. Considering that the monetary authority was forced to revise its inflation target to seven per cent (from six per cent announced in May) by March 2012, the central bank should persuade the government to revisit the issue of its responsibility to contain inflation. There is no point in continuing to use monetary tools to curb a trend that has more to do with fiscal and supply issues.

K V Rao, Bangalore

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