HOW TO CONTROL INFLATION BY RBI,GOVT AND ECONOMY ITSELF.

HIT INFLATION FOR FIT ECONOMY

THE SHARP FALL IN INFLATION ARISE MANY QUESTION FOR US.ACCORDING TO ME THERE ARE LOT OF REASON FOR ITS SHARP FALL.RBI GOVERNOR DR. RAGHURAM RAJAN TOOK SEVERAL STRICT DECISION TO CONTROL THE ECONOMY.IN INDIA LOT OF PEOPLE ARE LIVING UNDER PROVERTY LINE AND IT IS OUR RESPONSIBILITY TO GIVE EMPLOYMENT, FOOD AND SHELTER TO OUR CITIZEN .IF THE FOOD PRICE IS GOING UP THEN IT CREATES LOT OF PROBLEM TO THEM.SO IT IS OUR FIRST PRIORITY TO CONTROL THE FOOD INFLATION.RBI DECIDED TO MAINTAIN CPI(CONSUMER PRICE INDEX ) INFLATION AT 8%  IN 2015 AND 6% TO 2016 BUT A YEAR BACK IT WAS AROUND 11.2%.RBI ACHIEVE ITS TARGET IN 2014 AND CPI INFLATION CAME DOWN TO 4.4% IN NOV. 

WELL LETS DISCUSS HOW RBI HIT THE MILE-STONE-

1 RBI TIGHTEN THE MONETARY POLICY TO CONTROL THE FLOW OF CREDIT OR  RAISE THE INTEREST TO MAKE LOAN COSTLIER WHICH AFFECT THE EMI.

2 CONTROL THE LIQUIDITY OR ABSORB THE EXCESS MONEY FROM BANK,FINANCIAL INSTITUTION,INDIVIDUALS OR FROM ECONOMY.

3 IN WINTER SEASON THE PRODUCTION OF CROP AND VEGETABLE INCREASES WHICH REDUCE THE FOOD INFLATION WHICH HIT THE WPI(WHOLESALE PRICE INDEX) AND CPI INFLATION TO FIT THE GDP.

4 NO INDICATION FOR REDUCTION IN POLICY RATE.

5 LESS PRESSURE FROM GOVERNMENT TO INFUSE MONEY IN THE ECONOMY.

6 BULLISH SHARE MARKET SUPPORT THE RBI GOVERNOR TO TAKE DECISION      ACCORDING TO CHOICE.

   

7 STABLE GOVERNMENT BOOST THE ECONOMY GROWTH AND REDUCE INFLATION.

8 FALL IN THE CRUDE OIL PRICE REDUCE THE TRANSPORTATION COST WHICH HELPS TO REDUCE INFLATION.

9 DEREGULATION OF OIL PRICE, REDUCE THE LOSS OF SUBSIDY OF GOVERNMENT WHICH MAKES GOVT STRONG.

10.DISINVESTMENT IN VARIOUS SECTOR REDUCE THE LOSS OF GOVT AND BOOST THE FDI HELPS TO INTRODUCE NEW TECHNOLOGY  AND MONEY IN THE INDUSTRIAL SECTOR.