India: Sinking or Shining?

Monetary Policies

The monetary policies issued by the Reserve Bank of India to curb the inflation have not proved to be effective as yet. The imbalance between the demand and supply and lack of coordination between the ministries of commerce, finance, agriculture, food and consumer affairs have worsened the situation. These ministries have failed to make a balance in the needs of exporters and the domestic market has increased the price of certain food products such as sugar, onions and pulses. RBI has increased the interest rates thus holding back the investments in industry and capital formation. The government is stuck to the plan of increasing the rate of gross domestic product rather than making sure that the equitable distribution of the benefits that may lead to economic growth which has aggravated the phenomenon of ‘jobless growth’ in the country.