Steps to prevent inflation in india?

Question

Steps to prevent inflation in india?

Answer 1

If I were a treasury official in India, I would look closely at increasing or decreasing the cash rate according to the economic circumstances. In times of rising prices (inflation), banks interest rates woul need to be raised particularly if the inflation rate begins to hang over the 3% mark. Raising interest rates will have the effect of reducing consumer spending therefore keeping the price of goods and services low. Inflation is like a cancer to any economy and must be controlled. I hope this covers it. Have a great day.