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ASSOCHAM urges RBI to cut CRR, REPO Rate
03 Oct '08
4 min read
It lies in the shortages of goods, particularly food and metals, due to global scarcity and the attendant speculative activities building around the same.
The Regulator should give adequate weightage to the fact that price rise has been mainly on account of supply crunch and in view of dropping growth rate, tightening monetary policy would not be a wise step.
The Chamber argued that presently inflation is a global phenomenon and domestic demand has little role in fueling inflation pressure on the essential commodities The government and RBI should adopt a two pronged strategy.
In long term, they should adopt measures to boost farm production and divert resources towards increasing productivity.
As short term measures, government should concentrate on strengthening the public distribution system. Government should aim at improving the functioning of the public distribution system by making use of the modern technology. The quality of food provided under PDS should also be improved.
The budgetary allocation for the food subsidy may be increased to give relief to the consumers to meet the problem of price rise.
In the Union Budget 2008-09, the food subsidy was raised by Rs.1121 crore from the previous year, to Rs.32,667 crore. It formed 6.4 per cent of the total non- plan expenditure of the government.
The Regulator should give adequate weightage to the fact that price rise has been mainly on account of supply crunch and in view of dropping growth rate, tightening monetary policy would not be a wise step.
The Chamber argued that presently inflation is a global phenomenon and domestic demand has little role in fueling inflation pressure on the essential commodities The government and RBI should adopt a two pronged strategy.
In long term, they should adopt measures to boost farm production and divert resources towards increasing productivity.
As short term measures, government should concentrate on strengthening the public distribution system. Government should aim at improving the functioning of the public distribution system by making use of the modern technology. The quality of food provided under PDS should also be improved.
The budgetary allocation for the food subsidy may be increased to give relief to the consumers to meet the problem of price rise.
In the Union Budget 2008-09, the food subsidy was raised by Rs.1121 crore from the previous year, to Rs.32,667 crore. It formed 6.4 per cent of the total non- plan expenditure of the government.
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