Refrain from knee-jerk policies to curb inflation: Expert

Renowned agri-scientist M S Swaminathan today advised the government to refrain from "knee-jerk" policies to deal with food inflation.     

"Wherever you see a problem of inflation, develop a policy which is not just a knee-jerk policy," he said, adding that it made no sense to suddenly ban export of agri-commodities like onions.     

A cohesive long-term policy should be developed to ensure that supply-demand situation of farm items is managed in time, he told reporters on the sidelines of the 4th Agriculture Leadership Summit held here.     

Led by expensive food and manufactured items, inflation climbed to a 13-month high of 9.78% in August, suggesting that interest hikes by Reserve Bank since March 2010 have proved ineffective in taming the rising prices.     

Commenting on the RBI's frequent rate hikes, Swaminathan said, "Changing the monetary policy affects only the 10% of the country's population..."     

The interest rate changes do not help the 90% of the population, he said, adding that the central bank's efforts were not having any impact on food inflation.    

Swaminathan, known as father of green revolution, said the problem of food inflation should be tackled at the micro level.    

He suggested that the government should disaggregate each component causing inflation and deal with them independently.    

Inflation, based on the Wholesale Price Index, went up from 9.22% in July. The near double-digit inflation in August is highest since July 2010 when prices went up by 9.98%.