Don't get spooked by the inflation

Monetary policy today is on the right track, delivering 4% year-on-year CPI inflation, which is the most that it can do

Inflation has risen, particularly with a sharp rise in vegetable prices. This is not, however, a time to get too worried about inflationary pressures in the economy. The RBI is on the right track on what is being done in monetary policy. The problem lies in the financial system: The attractive interest rate at the short end of the yield curve for government bonds is not translating into attractive interest rates for many borrowers in the country.
 
Food and beverages (F&B) make up about 45% of the weighting in the consumer price index (CPI), and F&B inflation has gone up from about zero (year-on-year)