Not surprisingly, inflation has surged, consumption has faltered, and the Indian rupee has weakened. The RBI has already started raising the interest rates and sucking out excess liquidity in the system. The government should now step up and consider how tariff reductions can address the growing inflation concerns.
By all accounts, inflation in India is not due to overheating of the domestic economy or any sudden spurt in demand but due to global factors such as high commodity prices caused by supply disruptions and liquidity overhang. So, it is difficult to say whether the actions of our monetary authorities alone will
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