Finance Minister on inflation

If you believe Milton Friedman, inflation is always and everywhere a monetary phenomenon. There are, of course, people who disagree with that. But if you consider the monetary phenomenon, then monetary steps are the first and the most important line of defence. All that we are doing is tightening aggregate demand. If there is demand in the economy — and with the economy growing at 8.9 per cent there will be high demand — what we are doing is moderating demand. Fiscal steps are the next line of defence. We have taken a number of fiscal measures. If necessary, we will not hesitate to take more fiscal and monetary measures says the Finance Minister in an interview to news channel.

Catch the complete interview here.