Sumary of India’s inflation situation ‘very alarming’; needs better curation of policy between RBI, FinMin: Kaushik Basu:
- India’s wholesale price-based inflation is at a 30-year high, leading to a “very alarming” situation for the country, former World Bank chief economist Kaushik Basu said on Thursday.
- He, however, doesn’t see any risk of hyperinflation, but cautioned that if retail inflation follows wholesale prices, it might lead to “inflationary crisis”.
- Participating in a virtual event organised by the Asia Society, India, Basu said the inflationary situation in India is at a “very risky bend”.
- “There is a big risk of inflation and actually one particular kind of inflation.
- Basu added that “generally wholesale price inflation seeps into retail price inflation, so that this is a very alarming situation for India because prices are rising quite rapidly”.
- Basu, who served as a chief economic advisor to the government of India during 2009 to 2012, has written a new book titled ‘Policymaker’s Journal: From New Delhi to Washington D.
- The eminent economist said the “inflationary situation is at a very risky bend.
- Stating that India needs a much better curation of policy once again between the Reserve Bank of India and the finance ministry, Basu said, “I feel not enough is happening once again between the Treasury, the finance ministry and the central bank for the inflation.