RBI naive to think inflation will come down

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

By Sanjay

The RBI is naive to think that inflation will come down just because the vegetables prices may soften in the days to come. Vegetables are a small thing in a basket of goods consumed by the common man, the more important reasons for inflation is the ever increasing prices of cereals like rice, wheat apart from pulses which are consumed more in quantity than the vegetables and even the expenditure of the common man with regards to food mostly consists of the cereals.

The inflation will be higher as long as the government continues to increase the prices of diesel as it is the fuel for 80 percent of the economy and also since the MSP (Minimum support price) of cereals and Pulses are always ever increasing due to political reason (more than economic reasons) the RBI is wrong to just say that just because the vegetable prices comes down inflation will fall.

Updated Date: Dec 21, 2014 02:25 AM

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