India Inflation Basket Needs Urgent Revision, Economists Say

India’s retail inflation basket needs to be revised to improve the efficacy of monetary policy, according to a paper by a New Delhi-based economic policy think-tank.

“Higher the weightage of food in overall CPI, the more cumbersome it is for monetary policy to contain inflation,” economists including Deepak Mishra and Ashok Gulati wrote. “The structure of headline inflation in India is quite different from the advanced economies which limits the efficacy of monetary policy in India,” they wrote.