In the interim, a battle rages between those who believe curb on export and other supplies are the way to tackle things and those who believe these reduce supplies.
A fresh study by the IMF's India office, however, suggests the battle against inflation may already have been won as far back as last month.
In which case, supply-side measures by the government or monetary measures such as the increase in the cash reserve ratio by the Reserve Bank of India (RBI) would have been unnecessary.
Official inflation is measured by the change in the price index (Wholesale or Consumer) over that a month ago (year-on-year). What the IMF has done is to measure the monthly change in this index, and then removed the impact of the change that takes place due to seasonal factors such as the crop coming in.
The reason some economists prefer this is that the year-on-year index is heavily influenced by single events (a sharp rise in prices last year will artificially lower inflation the next year, for instance) while the seasonal adjustment eliminates this. The monthly data, seasonally adjusted, show that inflation started declining in April.
The IMF paper also does a seasonal adjustment on the weekly data, calculates the average inflation for the past five weeks and multiplies this by 52 to arrive at the likely inflation for the year. It says this is just 4.7 per cent, a figure that shows inflation is already within the RBI's comfort zone of 5 to 5.5 per cent.
Yet, despite inflation being comfortable, the IMF points out, the year-on-year changes would still show (erroneously) inflation levels to be very high. If inflation continues at the average of the past five weeks, the IMF says, the year-on-year inflation rate would still rise to 9 per cent till June, making headline news
