PROBLEM OF INFLATION

Written by Ranjan  
s market buying this? - Inflation will come down in 4 months

Inflation in India has not built up overnight. There are severe supply bottlenecks in the country where major reforms are needed. But unfortunately, Government of the day slept over the problem for so long that now even panic responses cannot help. Inflation problem cannot be solved by talking it down. It requires bold thinking and strong policy making which unfortunately has not happened and that’s why everyone is lost now.

This is what Montek Singh Ahluwalia has been saying since start of 2010. This is called - talking down the inflation

APRIL 2010
India’s inflation rate may decline in two to three months

JULY 2010
Inflation may return to a comfortable level by the end of the year (December)

AUGUST 2010
There is a moderation in the rate of inflation under way and it will become quite comfortable by December …The movement is in line with what we have been arguing

This is what Justin John, Director European Hedge Fund, thinks about one of our revered policy makers

Without understanding the dynamics of the current inflation, Ahluwalia has been shooting his mouth over about prophetic movement of prices. That was enough for him to be fired if he was in a corporate setup. Well he is not and he lives another day given mediocrity of such nature is welcomed in the government

Widespread concern not limited to India

Here’s what Marc Faber has to say - Rising inflation pressures in emerging market nations will make Europe and the US better investment opportunities in 2011.. We have started witnessing this in FII flows in 2011.

Inflation is serious Issue

Inflation has a tendency to come back more strongly if one avoids it. It’s a problem that should always be taken on seriously.