Raghuram Rajan has a new idea to fight inflation — increasing production of milk, bread, eggs, and so on. The headline inflation, technically known as Wholesale Price Index (WPI), stood at 7.55 per cent in August against 6.87 per cent in July and 9.78 per cent in August last year.
Talking to newspersons, he said, “One of the concerns of the last few years has been food inflation, which has been not so much within the control of the Government. This is… because our population has become richer, a good thing, and therefore has demanded more high-end food products such as milk, eggs, meat rather than the cereals.”
He felt that in order to rebalance or reduce food inflation, “we have to produce more of such products”. “So, productivity is going to be part of fighting inflation,” he said. He also admitted that lower kharif sowing is going to add pressure on inflation.