Government steps to control inflation

Controlling inflation has been a priority area for the Central Government according to Economic Survey. Every year, Government takes number of steps to control inflation, which we can read in the Economic Survey, a dedicated chapter summarises all the government steps.

For example, in the previous years, government has taken following steps:

  • Advisories are being issued, as and when required, to State Governments to take strict action against hoarding & black marketing and effectively enforce the Essential Commodities Act, 1955 & the Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities Act, 1980 for commodities in short supply.
  • Regular review meeting on price and availability situation is being held at the highest level including at the level of Committee of Secretaries, Inter Ministerial Committee, Price Stabilization Fund Management Committee and other Departmental level review meetings.
  • Higher MSP has been announced so as to incentivize production and thereby enhance availability of food items which may help moderate prices.
  • A scheme titled Price Stabilization Fund (PSF) is being implemented to control price volatility of agricultural commodities like pulses, onions etc.
  • The Government approved enhancement in buffer stock of pulses from 1.5 lakh MT to 20 Lakh MT to enable effective market intervention for moderation of retail prices. Accordingly, a dynamic buffer stock of pulses of upto 20 lakh tones has been built.
  • Pulses from the buffer are being provided to States/UTs for PDS distribution, Mid-day Meal scheme etc. The requirement of pulses by Army and Central Para-military Forces.
  • States/UTs have been advised to impose stock limit on onions. States were requested to indicate their requirement of onions so that import of requisite quantity may be undertaken to improve availability and help moderate the prices.

Like the above measures, government takes stpes to control – DEMAND pull Inflation and COST Pull inflation.