Helpless in Face of Inflation

Helpless in Face of Inflation INDIAN society is said to be highly sensitive to inflation. This is primarily because the vast majority of the people have very vulnerable living standards and cannot withstand much erosion of their purchasing power. Also, people here can still express their anguish at periodic intervals through the ballot box. The suffering caused by the current rising inflation rate should be all the more severe for a variety of reasons. First, with its blinkered perspective of reducing the gross fiscal deficit and, in particular, avoiding borrowing from the Reserve Bank of India, the government has diluted many social and infrastructural development programmes which in the past provided some societal support to the poorer segments. The promised inflation control is, however, nowhere in sight. Second, the supply and demand factors, as they have operated in the past one year, do not warrant such sharp increases in prices as have occurred. Government policies have tended to reinforce an environment which has encouraged hoarding and speculation in many commodities. Finally, government has promoted a social environment in which rapidly growing inequalities in tile distribution of incomes and assets have tended to encourage conspicuous consumption among the upper sections of society.