Dear Rajan, answer to inflation lies in agricultural market reforms

Editor’s note: This is a reader comment we got on the article, “ Raghuram Rajan flunks his first major test, makes same mistake as Subbara o.” As is Firstpost policy, we have lightly edited for grammar and spelling, but the comment has been left as is.

By Nognir

Pardon my naivety but since the inflation is being driven primarily by food articles, I don’t see how RBI can do much about it by tightening money supply. The same scenario has been repeating itself for the last 1 year. High inflation (mainly due to food products) -> RBI hikes rates and expects inflation to come down -> Growth falls and yet we still have high inflation. I’m no economist but perhaps the answer to this inflation cycle lies away from economics and more into agricultural market reforms. Currently action of govt. are like the doctor who prescribes anti-biotics for fever without correcting the underlying infection.