SEBI Reg. Investment Advisor

Download App
Help Center Pricing
Money Works 4 Me Logo MoneyWorks4Me
Login Get Free Account
Sign Up

MoneyWorks4Me

Log In Sign Up Schedule Free 15‑min Call
Login Get Free Account
Sign Up
  1. Home
  2. Stock Market News
  3. Need to use tighter Monetary and Fiscal Policy to address the issue of Inflation: C Rangarajan

Need to use tighter Monetary and Fiscal Policy to address the issue of Inflation: C Rangarajan

14 Jun 2011 Evaluate
The headline inflation for month of May surged to 9.06% from 8.66% from last month. This elevated inflation has raised the concern over sustainable growth of the economy. To tame inflation, pitching the tighter monetary policy by the Reserve Bank of India,  the Prime Minister's Economic Advisory Council (PMEAC) chairman, C Rangarajan said, "I think the inflation numbers are in a sense upsetting ... We need to address the issue of inflation even more strongly. We need to use more monetary and fiscal policy to contain inflation,"

According to the official data, the headline Inflation went up to 9.06% in May from 8.66% in April. This increase in inflation is due to increase in prices of manufactured products petrol and certain food items. The primary article and fuel and power fell almost by percentage point in May from April. However, manufactured products rose to 7.27 % from 6.18% of last month.

It is clearly evidenced from the last quarter economic data and WPI inflation; there is inverse relationship between economic growth and Inflation. The economic expansion for 4th quarter of 2010-11 were 7.8% and the average inflation for Jan to March were 9.57%, indicating high inflation is hampering the economic growth, and the C Rangarajan’s statement is showing government is ready to for short term slowdown for long term growth.

On the expected hike in RBI’s policy rate at its mid-quarterly review C Rangarajan said, I think the RBI will probably look at the inflation issue more seriously and will take some action... (it) will probably decide to do in the context of the high level of inflation.” however, he did not mentioned any number on the quantum of the hike in the key policy rates, he said, "I do not know what the RBI will do, but I think the concern regarding inflation will be very dominant."

From March 2010 RBI has increased its policy rate for more than nine times, on 3 May it increased its key policy rates by 50 basis points to curb inflation. RBI expects inflation to remain at this elevated level for the first six months of the current financial year.   

Register Now to get our Free Newsletter & much more!
2026 ©The Alchemists Ark Pvt. Ltd. All rights reserved. MoneyWorks4Me® is a registered trademark of The Alchemists Ark Pvt. Ltd.

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through:

×