This refers to the report "RBI panel wants retail inflation as new policy benchmark" (January 22). There is nothing new about about the proposed Monetary Policy Committee since a similar committee reviews inflation in the UK and the US. The Urjit Patel committee talks only about retail inflation? What about food inflation? It has about 50 per cent weight in consumer price index. What about non-food, non-oil, manufacturing inflation? The government has an important role in controlling food inflation and to that extent the concept of retail inflation is out of the Reserve Bank of India (RBI)'s ambit. The Urjit Patel committee appears to have re-defined the role of RBI itself by prioritising inflation targeting as the important function, and economic growth can come on its radar only when it achieves the inflation target. Although the RBI panel has attempted to re-draw the lines between RBI and the government, the real issue of retail inflation remains unsolved. As long as we have unbridled fiscal expenditure coming under the domain of the government, the inflation ball is in its court.
K V Rao Bangalore
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