India's Inflation Challenge Demands New Approach
Economic experts are calling for a fundamental rethinking of India's approach to controlling inflation, arguing that the current interest rate-based policy framework is inadequate for managing headline inflation effectively. The debate has gained momentum as the country faces persistent price pressures across multiple sectors of the economy.
The Limitations of Current Monetary Policy
According to economic analyst Gourishankar S Hiremath, whose comments were published on November 13, 2025, the traditional toolkit of interest rate adjustments cannot single-handedly address the complex nature of inflation in the Indian economy. The existing framework primarily targets core inflation while often struggling to contain volatile food and energy prices that significantly impact household budgets.
The Reserve Bank of India's current inflation targeting mechanism has shown limitations in dealing with supply-side shocks and structural issues that frequently drive price increases in essential commodities. These limitations become particularly evident during periods of monsoon variability, global commodity price fluctuations, and supply chain disruptions.
Balancing Price Stability and Livelihood Security
Experts propose that the new inflation management framework must achieve a delicate balance between price stability and livelihood security for millions of Indians. This approach recognizes that controlling inflation numbers alone cannot ensure economic welfare if it comes at the cost of employment and income stability for vulnerable populations.
The proposed rebalancing would involve coordinated efforts across multiple policy domains, including agricultural reforms, infrastructure development, social safety nets, and strategic food reserves. Such a comprehensive approach would address inflation at its source rather than merely treating the symptoms through monetary policy interventions.
As India continues its economic development journey, the need for an inflation strategy that protects both price stability and citizen livelihoods becomes increasingly urgent. The ongoing discussions among policymakers and economists suggest that significant changes to India's inflation management approach may be forthcoming in the near future.
