How does government control inflation in India

Explain the measures taken by the government to control inflation in India.
The Indian government implements various measures to control inflation. Some of these measures include: 1. Monetary Policy: The Reserve Bank of India (RBI) uses monetary policy tools like interest rates, cash reserve ratio (CRR), and statutory liquidity ratio (SLR) to control inflation. By increasing interest rates, the RBI makes borrowing costly, reducing excessive money supply and curbing inflation. 2. Fiscal Policy: The government controls inflation by implementing sound fiscal policies, including managing government spending, taxation, and public borrowing. These policies aim to maintain a stable economic environment. 3. Supply-Side Measures: The government focuses on increasing agricultural productivity, implementing irrigation projects, and improving infrastructure to enhance the supply of essential commodities. This helps stabilize prices and reduces inflationary pressures. 4. Price Control: The government may control prices of certain essential goods to prevent inflation. This can be done through fixing price caps or subsidies, ensuring that they are affordable for the general public. 5. Effective Regulation: The government strengthens regulatory institutions to monitor and prevent anti-competitive practices, hoarding, and other market distortions that contribute to inflation. By employing these measures, the Indian government strives to achieve price stability, economic growth, and welfare for its citizens.
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