But no matter what the finance minister does in his budget, he will end up stoking some kind of inflation. The despite the recently released February inflation figure of 6.95 percent, which was below expectations.
Cutting subsidies means higher prices for fuel and fertiliser; withdrawing the excise/service tax stimulus of 2008 means higher prices of goods and services. A new Food Security Act means more food will have to be procured, and this means raising food support prices.
So if any effort in reform means raising prices, how will inflation ever subside?
A panel of economists that Firstpost spoke to debates prospects for inflation in the context of the finance minister’s various options in the forthcoming budget.