Indian economy is in the grip of rising prices. Explain any two measures to control the situation.
Two measures to control the rising prices are:
(i) Rising prices can be controlled by reducing government expenditure, especially non-develop- mental expenditure such as, expenditure on public administration, defence and subsidies on non-merit goods and other wasteful expenditure. (ii) Monetary policy measures such as increase in Cash Reserve Ratio, mopping of excess liquid reserves with the banks through open market operations by the Central Bank, so as to reduce the availability of credit and as a result, rising prices can be controlled.