IT IS THE BLINDNESS OF SOME CENTRAL BANKERS AND MPC MEMBERS TOWARDS FACTS OF FOOD INFLATION/INFLATION AND HOLDING TO A HIGH INTEREST REGIME DETRIMENTAL TO THE ECONOMY OF INDIA

IT IS THE BLINDNESS OF SOME CENTRAL BANKERS AND MPC MEMBERS TOWARDS FACTS OF FOOD INFLATION/INFLATION AND HOLDING TO A HIGH INTEREST REGIME DETRIMENTAL TO THE ECONOMY OF INDIA


Dear Readers,

It is the Blindness of Some Central Bankers and MPC(Monetary Policy Committee) Members of RBI towards the facts of Food Inflation/Inflation and holding to a High Interest Regime is Detrimental to the Economy of India.

In a Note, not very long back, only last month I had demonstrated, it is there you can read it with a Graphical Image, by increasing the Interest Rate (Repo Rate of RBI) 6-Times Continuously from April 2022 to May 2023, the RBI climbed up the Interest Rate from 4% to 6.5%. Having climbed to a Repo Rate of 6.5%, RBI is sitting there at the Highest Level of Interest rate and in the mean while 8-MPC Meetings have gone where the decision has been Status Quo, means keep the Interest Rate at that Highest Level of (Repo Rate) 6.5%.

I say again, the MPC Members of RBI who are some economists (Primarily Professors of some Institutes) and RBI Officers, have the dogmatic and blind view that Inflation/Food Inflation can be controlled by the OnlyTool of High Interest Rate. Some people are blind to this view, they exist, their existence can not be denied.

They simply are not able to understand by their myopic view that Food Inflation is not a Function of Money Supply; rather a Higher Interest Rate Regime (that squeezes money supply) adds directly and indirectly to Food Inflation. The Attitude to Control Food Inflation by Higher Interest Rate Regime, is not only Orthodox and Non-Pragmatic, it is highly myopic.

The Food Inflation is a Primary Function of Demand and Supply of Foods. In a country like India, where we have to feed 1400 million ( 140 crore ) people, a minor supply disruption due to any natural/non-natural reasons can cause Food Inflation, it can not be controlled by a High Interest Rate and it is futile to expect to control food inflation by a High Interest Rate Regime. The Food Inflation can be managed by diligent management of Demand and Supply of Foods in India. Rather a comfortable Interest Rate Regime will reduce Logistics and Supply Chain Cost of the Foods Value chain that will discourage Food Inflation, that these Central Bankers and MPC Members of RBI are not able to comprehend with Prudency and Pragmatically.

You can read the following article that has appeared today:

India's disinflation process proving to be arduous thanks to stubborn food inflation: RBI Guv Das

The High Interest Rate Regime is very much detrimental to the Economy of India, unfortunately these Central Bankers and MPC Members of RBI have not been able to comprehend appropriately.

It is in fact expected very much that the New Government of India will take due care of such sticky fellows to fall in line as per the National Need.

With best regards,
Dr. Nimain Charan Biswal,
Mumbai, India


About the Author: Dr. Nimain Charan Biswal is a B.Sc.(Agri. Science and Technology), M.B.A. and Ph.D.(Management Area ) by qualifications; and he has 38+ years of work experience in both industrial and development sectors in diversified fields of social importance. He has been educated at Orissa University of Agriculture and Technology (OUAT)-Bhubaneswar, Institute of Rural Management Anand (IRMA) and Gujarat University (with Resource Support of IIM-Ahmedabad). He is further educated at IIM-Calcutta, XLRI-Jamshedpur, Apple Computer Industries and Spar Inc., USA. He has worked for reputed National and International Organizations in Senior/Top Management Capacities at Board level as well as Managing Director and CEO. He is a management expert covering extensive areas from management in industrial sectors, management in agriculture and dairy, development management to management of public systems. He is a prominent professional of India and known Internationally as well. He lives at Mumbai in India.



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