The Surging Inflation - Other Views

India growth story is hot. And, so are the debates on soaring prices and overheating. As the government is trying its best to dowse the inflation and the political heat it has generated (and RBI doing its part on the monetary side), I decided to check out what the blogging community is saying on this. Are rising prices a necessary side-effect of high growth which we must learn to live with or are they symptoms of a deeper malaise? Why has the government not succeeded in containing the prices despite a series of measures over last few months? What should be done immediately? What should be done in the longer run? How to address the supply bottlenecks?

I came across some very good pieces on the subject. The common thread running through most of the discussions on the blogosphere is about supply side constraints especially those relating to agriculture commodities. It's interesting that many of them refer to onions. The ubiquitous onion seems to have become a symbol of price rise affecting common man and having a potential to affect electoral politics.

I am prividing links to two of the blog articles that I found interesting.

The first one is Inflation + Price of Onions. Kamla Bhatt in this post says that infrastructure bottlenecks should be adressed, as lack of food is not an issue as much as lack of an effective distribution channel.

"Inflation is on the rise and you can see it all around you. Price of onions, wheat, oil have all been climbing northwards and have hit the pocket book of many consumers. The economy is overheated and there is no question about that. ...There is no question that infrastructure is one of primary bottlenecks in India. If the infrastructure bottleneck is addressed it will lead to swifter movement of goods and reduce the transportation costs and the overall cost of products."

The second post is from "chutney spears" How to solve inflation in India? The author Shivaji Das talks about the signs of high prices as experienced in an Indian city. In a lighter vein, he offers some suggestions for controlling inflation, including putting curbs on the Bacchan family’s visits to temples to pray for happy marital life for Aishwary-Abhishek and firing the people publishing such high inflation numbers.

Please give your opinion on this.