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How does the Indian government control inflation

Learn about the center's method to control inflation by stopping supply of rice and wheat to states
The Indian government has various methods to control inflation, including monetary and fiscal policies. One of the ways that it controls inflation is by regulating the supply of essential commodities such as rice and wheat. The central government, as a part of its strategy to control inflation, may stop supplying rice and wheat to the states. This decision is taken when the availability of grains is low, and the prices of essential commodities are increasing.
  • The government keeps track of the supply of essential commodities and takes measures to regulate it.
  • When the supply is low, the government may decide to suspend the supply to the states.
  • This helps the central government manage the supply-demand dynamics and avoid further price hikes.
  • The decision to stop supply to states is taken by the food ministry and is reviewed periodically.
  • The central government also monitors the prices of essential commodities at various levels, including wholesale and retail prices.
  • The government may also take measures such as reducing import duties on essential commodities to increase the supply.
Overall, regulation of supply is one of the effective ways that the Indian government uses to combat inflation, and it can help in maintaining price stability and ensuring food security in the country.
Answered 2 years ago
Amrita Aspirants