What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of the RBI to control this type of inflation.

Theme

T133 Inflation, monetary policy & the poor

What UPSC asks in this theme

Questions ask why food inflation stays high and whether RBI's monetary policy can control it, and why the poor need inflation and unemployment managed beyond welfare schemes.

What to cover

• Inflation targeting framework (4±2%), MPC
• Food inflation drivers: supply shocks, storage, perishables
• Limits of monetary policy on supply-side inflation
• Inflation as a tax on the poor

Writing the answer

• Explain why supply-side steps matter

These notes are for the whole theme, built from all 2 of its PYQs. UPSC does not publish model answers.