India lacks the political will to control inflation

The setback to growth is not because of the deteriorating world economy. Effects of that are yet to hit India in full measure. The decline is owing to poor management of the domestic economic fundamentals by governments at the Centre and in the states. Monetary authorities whose mandate is to control inflation have tried their best but with severe constraints. The government was more focused on growth than on controlling inflation, and on attracting volatile foreign institutional investment inflows via Mauritius and elsewhere. It neglected fiscal control on deficit.

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