Question

Read the following text carefully:

Union Food and Consumer Affairs Minister said that the Central Government has taken many proactive steps in the past few years to control retail prices of food items. He said that the government aims to keep inflation under control without compromising the country’s economic growth. Retail inflation inched up to a three-month high of 5.55% in November 2023 driven by higher food prices. Inflation has been declining since August 2023, when it touched 6.83%. 140 new price monitoring centres had been set up by the Central Government to keep a close watch on wholesale and retail prices of essential commodities. The Government has banned the export of many food items like wheat, broken rice, non-basmati white rice, onions, etc. It has also reduced import duties on edible oils and pulses to boost domestic supply and control price rise.

On the basis of the given text and common understanding, answer the following questions:

1. Mention the number of new price monitoring centres set up by government.    [1]
2. State any two proactive measures taken by government to boost domestic supply and reduction in prices.    [2]
3. Explain any one monetary measure used to control inflation.    [3]

Answer 1

1. The government has set up 140 new price monitoring centres.
2.   
   1. The government has banned exporting essential food items like wheat, broken rice, non-basmati white rice, and onions.
   2. It has reduced import duties on edible oils and pulses to increase domestic availability and control price rises.
3.    
   1. The Reserve Bank of India (RBI) uses the monetary policy tool of increasing the repo rate to control inflation.
   2. When the repo rate is increased, borrowing becomes expensive for businesses and consumers, leading to lower spending and investment.
   3. As a result, demand decreases, reducing inflationary pressures in the economy.