Assignment 1-Written Analysis

Barath Balachandran

 Efforts to Reduce the Rate of Food Inflation in India

 Defining the issue  Approaches already taken by the Indian Government
o Effectiveness of the approaches

 Proposed approaches involving the Food Security Bill

o Problems and repercussions in the implementation

 Alternate solutions
o Inclusive growth leading to increase in the spending power of the population.

Definition
Inflation is a rise in the general level of prices of goods and services in an economy over a period of time -Blanchard, Olivier (2000). Macroeconomics
(2nd ed.). Englewood Cliffs, N.J: Prentice Hall.

Food Inflation has been on a rise in the last 18 months. Base effect.

Approaches already taken by the Indian Government

Boost Farm productivity Trim fiscal deficit in the budget. Key policy rates raised 9 times in the past year. Effectiveness of the approaches Inflation reduced from 11.49 in Feb 2011 to 8.37 in May.

Food Security Bill

Subsidized food for 68% of population

Alternate Solutions
Improve distribution channels and supply chain. Populist measures for inclusive growth.

THANK YOU!!!