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Inflation: A price damper on growth


UPDATED: June 26, 2021 23:02 IST
Bikes being fuelled at a petrol pump near Feroz Shah Kotla stadium, New Delhi; Photo by Sonu Mehta/Getty Images
Rising inflation is tricky in many ways. When food and fuel prices rise beyond a particular threshold, it creates a public outcry and puts governments on the back foot. Inflation in commodity prices like steel and cement hurts industries that use them as inputs, but the manufacturers of those commodities gain. In the current context, farmers, who might have benefited from the high food prices, are instead in trouble because of soaring input costs. Wary that inflation may surge past its targeted ceiling of 6 per cent, the RBI (Reserve Bank of India) has decided not to cut interest rates, which has consequences for overall economic growth. ....

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