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Inflation BY AYUSSH SANGHI Measures to Address Inflation Part 4.14 ress 1nflati01Par
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How to Address Inflation? . Usually three ways are adopted to contain inflation: Usually three watcontain inflation: Monetary Policy . Fiscal Policy Administrative Measures
Fiscal Policy Fluctuating Non-Plan Expenditure: . High non- plan expenditure by the government increases the amount of monev in the hands of each individual in the economy Thus, there is high purchasing power and high demand for the products. The problem with non-plan expenditure is that it does not lead to a corresponding rise in the supply of commodities and thus resulting in demand-pull inflation. Reducing this expenditure may counteract the rising inflation problem
Fiscal Policy Fluctuating Non-Plan Expenditure: .Moderating indirect taxes like: e service taxX custom excise. High taxes lead to a rise in the price of commodities and thus leads to inflation. Reducing the taxes may help in curbing inflation.
Administrative Measures . In a country like India use of administrative measures have grown more effective from time to time in bringing about balance between demand and supply and thereby controlling inflation to an extent.
Administrative Measures . Inflation control policy requires demand and supply management that can be brought about by improving distribution and availability rather than production. Hence these measures address distribution and availability which are scarce and have resulted in inflation,