The country’s troubles may increase due to the increase in India’s wholesale price based inflation. On this, former Chief Economist of the World Bank Kaushik Basu has expressed concern.
Economists worried about rising inflation in India
Former Chief Economist of the World Bank Kaushik Basu has expressed concern over India’s rising inflation rate. He said wholesale price-based inflation is at a 30-year high, creating a “very dangerous” situation for the country. However, he made it clear that this does not show any risk of hyperinflation. He said these things while participating in a virtual program organized by Asia Society, India.
Basu said, “Usually the wholesale price inflation gets carried over to the retail price inflation, so it is a very dangerous situation for India as the prices are rising very fast. Basu, who served as the Chief Economic Adviser to the Government of India from 2009 to 2012, has also authored a new book titled ‘Policymakers’ Journal: From New Delhi to Washington DC’. He told that the inflation situation is at a very risky juncture. To bring this under control, there is a need to link monetary policy and fiscal policy.
Basu has once again suggested adopting a better policy between the Reserve Bank of India and the Ministry of Finance. “I don’t think there is any risk of hyperinflation or anything like that happening in India, but the inflation rate may increase further,” he said.
Wholesale price-based inflation eased marginally to 12.07 per cent in June as crude oil and food prices showed some moderation, while retail inflation fell to 6.26 per cent in June, albeit above RBI levels . Former Chief Economic Adviser to the Government of India Arvind Subramaniam also agreed with Basu’s point. He said that he is actually more concerned about inflation than before.
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