My column in Business Standard today is titled Inflation control. It is on the themes of why low inflation matters; what are the tradeoffs between GDP growth and inflation growth; the ban-milk-exports style of inflation control; monetary policy as the right path to achieving low and predictable inflation.
I am fascinated by the commitment of the Indian political system to low inflation. A de jure inflation targeting system can only, in the final analysis, be successful when it has such political foundations of support: when there are already glimmers of a de facto inflation target. Inflation has got to be important enough that politicians choose to give up other possible uses of monetary policy; my sense is that India does have this kind of passion about low inflation.