Roadmap for Answer Writing To effectively address the question regarding the causes of persistent high food inflation in India and the effectiveness of the Reserve Bank of India’s (RBI) monetary policy in controlling this inflation, follow this structured approach: Introduction Briefly define food ...
Inflation Factors in India Inflation in India is a complex issue influenced by various factors, ranging from global economic trends to domestic policies. This timeline explores some of the major contributors to inflation in the country. 2021-2023 Global Commodity Prices The surge in glRead more
Inflation Factors in India
Inflation in India is a complex issue influenced by various factors, ranging from global economic trends to domestic policies. This timeline explores some of the major contributors to inflation in the country.
2021-2023
Global Commodity Prices
The surge in global commodity prices, particularly oil and food, due to supply chain: disruption and increased demand contributed significantly to India’s inflation.
2021-2022
Fuel Price Hike
Rising Fuel prices, driven by Increased global oil prices and domestic taxes, impacted transportation cost, leading to inflation in various sectors.
Supply Chain Disruptions
The COVID-19 pandemic disrupted supply chains , leading to shortages and price increases for various goods, contributing to inflation.
2022-23
Weak Rupee
A weakening rupees against the US dollar increased the cost of imported goods, leading to higher prices and contributing to inflation.
2022-23
Monetary Policy
The Reserve Bank of India’s monetary Policy, including interest rates adjustment, influenced inflation by implementing borrowing costs and consumer spending.
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Model Answer Introduction Addressing persistent high food inflation is essential for ensuring economic stability and maintaining citizens’ standard of living, as recognized under Article 47 of the Indian Constitution. The phenomenon of food inflation in India is multifaceted, influenced by domesticRead more
Model Answer
Introduction
Addressing persistent high food inflation is essential for ensuring economic stability and maintaining citizens’ standard of living, as recognized under Article 47 of the Indian Constitution. The phenomenon of food inflation in India is multifaceted, influenced by domestic production, global market conditions, and government policies.
Effectiveness of RBI’s Monetary Policy to Control Food Inflation
The Reserve Bank of India (RBI) employs several strategies to manage inflation, including food inflation:
Shortcomings of RBI’s Monetary Policy
Despite these measures, the RBI faces challenges in controlling food inflation:
Conclusion
While RBI’s monetary policy helps curb inflation, its effect on food inflation is limited by supply constraints and global factors. A coordinated approach, including fiscal interventions and agricultural reforms, is essential for ensuring food price stability and economic resilience.
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