METHODS TO CONTROL INFLATION [ PART 2] #Inflation 2. COST SI | UPSC Economy
METHODS TO CONTROL INFLATION [ PART 2]
#Inflation
2. COST SIDE MEASURE
As a cost side measure, governments may try to cool down the price by cutting down the production cost of goods showing price rise with the help of tax breaks— cuts in the excise and custom duties (as happened in June 2003 in India in the case of crude oil and steel). This helps as a short-term measure.
In the long-term, better production process, technological innovations etc., are helpful. Increasing income of the people is the monetary measure to avoid the heat of such infation.
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