| April 11, 2008 |
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| Inflation beyond 4 per cent is always the matter of concern. Accordingly, ICAI is also concerned at the inflation going to 7.41%. We believe that this increase of inflation is mainly on account of increase in commodities prices. The Government of India has recently taken various fiscal and non-fiscal measures to curtail the rate of inflation. These measures may take some time before their impacts felt. Meanwhile looking to the high inflation, there is a need to take some immediate short-term measures. More efforts are required to make available essential commodities by strengthening public distribution system so that the poor section of the society is not seriously affected by increasing prices. |
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| The measures taken to curtail/control inflation such as increase in the interest rate should be cautiously attempted as it may not act as counter to the economic growth which otherwise is very important for developing nations like India. On an overall assessment, we as an Institute believe that there is no cause of much worry as India has a good track record of successfully managing inflationary forces in the past.
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