Best of BS Opinion: RBI cannot ignore inflation, containing subsidies, more
Here is the best of Business Standard's opinion pieces for today
 "Best of BS Opinion: RBI cannot ignore inflation, containing subsidies, more")
A lively debate is underway on persistently high food inflation and its implications for monetary policy. Economists at the finance ministry argue that higher food prices are often driven by supply-side, not demand-induced, issues whereas short-run monetary policy tools are meant to contain price pressure originating from excess aggregate demand. But as the top edits points out, high food inflation can lead to the un-anchoring of inflation expectations, which could significantly complicate overall inflation management. Therefore, the RBI cannot ignore pressure from food prices in overall inflation outcomes. Read it here
In other views:
Prachi Mishra examines the validity of competing views on global inflation – whether it was permanent or transitory. Read it here
Ajay Kumar says building trust between government and businesses is critical for economic growth but remains a challenge in India. Read it here
The second edit highlights the urgent need for states to rationalise expenditure. Read it here
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