Letters: Need to target inflation

The arguments in the column, "The problem with inflation targeting" (February 4) does not hold good for an economy like India where the poor, the most susceptible to inflation, are very high in number. Economist Stephen Roach's statement is valid only for developed countries that are "inflation-less", not developing countries like India where inflation is still a major problem.

Inflation hits the poor hard. Where the number of poor people is large, it makes every sense to target inflation. It is a different matter whether Consumer Price Index is the correct measure to target in this regard.

The writer's observation of the Reserve Bank of India prodding the government to control spending could be correct. It will be in the interest of the economy if both the government and the central bank challenge each other into taking positive actions.

A N Appaiah Mumbai

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