Anatomy of inflation : Part-I

Article Type

Article

Description

There is one single point on which there is a national consensus right from the prime minister to the opposition leaders to the public at large – the country is suffering from the serious malaise of inflationary pressures with their harmful effects on the lives of the citizens.

Inflation is generally welfare depressant and particularly inimical to the poor, the middle classes with no tangible assets, the salaried class, pensioners, widows and other fixed-income earners. The propensity to consume for all these groups is relatively high – they spend a substantial part of their incomes on essential items such as food, rent, utilities, transport and clothing and therefore they feel the pinch of inflation the most. It is therefore important to examine the underlying causes of inflation in a dispassionate manner and the remedial measures to tackle this issue in the future. Unfortunately, there is no magic wand to fix the problem in the short term and those who promise to bring down the prices immediately are not really serious. Distorted markets and weak public-sector institutions would not permit to do so, however sincere our intentions may be.

Publication Source

The News

Publication Date

11-4-2021

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