Logic sacrificed in this meaningless debate.

"One of the most important economic reforms accomplished by the Narendra Modi government was the Agreement on Monetary Policy Framework, which formalized the targeting of inflation," wrote Prof Dubey and Mishra. The idea is popular and, "Since 1990, it has been adopted by eight advanced and 32 emerging economies." "However, an issue that received minimal attention in the Urjit Patel Committee report and in the recent debate on the growth slowdown is that of the output cost of such a large and quick disinflation." At its latest meeting in December, the Monetary Policy Committee (MPC) kept interest rate unchanged at 5.15% by unanimous opinion. "Not a single economist among the 43 surveyed by Bloomberg News predicted this outcome," wrote Daniel Moss. Why, when "Central banks generally hate giving surprises"? The reason was food inflation caused by late heavy rains. "For a major economy, India appears far too worried about inflation targets, especially when other central banks are questioning their effectiveness." "If demand is sliding then price increases ought to subside. There's little inflation in a graveyard." Disinflation, or falling inflation, through monetary policy leads to a fall in output, and, hence, a slowdown in the economy. wrote Dubey and Mishra. This is the 'sacrifice ratio'. India's GDP grew by a mere 4.5% in the second quarter of this financial year, compared to 7% in the same period last year. "India is better off with a low and stable inflation, but this has surely not been costless," wrote Dubey and Mishra. The constant debate about inflation and interest rate in India is illogical and meaningless. Those who demand a higher rate of inflation must enumerate a figure they think will be ideal. Even the most ardent Modi supporter would surely not want an inflation rate of 10 million, as in Venezuela. The fact is, analysts will calculate the real GDP growth rate by deducting the rate of inflation from the nominal rate of growth and so, given a high rate of inflation, the rate of growth of real GDP will remain low. Why this constant clamor over inflation and interest rate? Because high inflation helps the government by reducing the value of government debt and by increasing tax collection as company earnings increase and higher wages lead to higher income tax collections. Thus, tax collection depends on nominal GDP, which is raised by high inflation. A low rate of interest reduces the borrowing cost of the government while penalising savers, usually retired people, thus transferring wealth from senior citizens to politicians. By not slashing interest rates more drastically the MPC "did real injury to the economy" and "needs to be wound up", wrote an angry R Jagannathan. We would absolutely support that. It will stop the stupid meaningless debate.