VISAKHAPATNAM: The Government should continuously monitor the state of the economy and the cost of borrowing money to control inflation, according to senior professor of economics in Andhra University, G. Ramachandrudu.
It should act immediately as was done by the USA last month which could control inflation within one week, he points out. It should immediately raise interest rates, CRR and formulate other banking policies. It should identify the essential commodities and sell them through public distribution system, he opines. The economists and politicians were equally worried over the sudden jump of inflation figures from last week’s 8.75 to 11.05 (12 per cent if adjusted), he adds.
The immediate effect of inflation would be on stock markets because of the boost in the cost of production and transportation.
This sudden increase in inflation was due to ‘cost push’, because of the rise in oil prices and its spiralling effect, he notes.