A new statement made on Monday by Reserve Bank of India (RBI) governor Y.V. Reddy gives us some idea how the spike in inflation has led to a flurry of activity. And suggests that the central bank and the government have over the weekend come to some sort of agreement on how the inflation menace is to be dealt with.
The government said on Friday that wholesale price inflation has crossed into double-digit territory. Reddy says that he had a detailed meeting with RBI top brass the same day “to evaluate” the problem. He then called both the finance minister and the Prime Minister on Saturday. Now, there will be “further internal assessment” at RBI and he “will also have consultations quickly with...members of the technical advisory committee on monetary policy”.
The finance minister also gave some insight into the government’s mood. He said on Friday that India faces “difficult times”. These are indications of tough action.