Apropos the editorial "Growth and inflation" (June 16), the Euro crisis reiterated a lesson, that fiscal and monetary policy regime influence the depth and duration of economic downturns. A plethora of big-ticket welfare schemes by the United Progressive Alliance-II government laid the ground for deficits, leading to inflation that stunted growth. Food inflation is a different story altogether and a change of government alone is no remedy. That makes the Index of Industrial Production of more material concern. The fiscal adage that current spending can be balanced by taxation and that reducing deficits on current spending is justified only if it is replaced by capital-spending programmes, will hold. Money spent on power and other infrastructure in the coming months will serve the economy well. If we manage to downtrend inflation and uptrend growth, we might wake up to a happy new year.
R Narayanan Ghaziabad
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