Shouldn't Indians expect anything more than food?

"India has kept its fiscal stimulus at no more than 2% of GDP. I have been a critic of this," said SA Aiyar. "If you do not have a large enough fiscal stimulus, you will not revive the economy fast enough either." But now he thinks that "India has proved far more resilient than expected", "despite having the smallest fiscal stimuli among major nations" and " Indian growth was steadily falling even before the pandemic -- from 8.3% in 2016-17 to 7%, 6.1% and 4.2% in subsequent year".   "In March Aiyar wrote that the fiscal package was "Outrageously small," and "At least triple the relief package and put more money into the bank accounts of the needy." "This mega stimulus should be financed by RBI, just printing the money needed." So, why the change of tune? Because, "Inflation has exceeded the RBI's range of 2-6%." This is mainly because of high vegetable prices and exorbitant taxes on fuel in excess of 60%. Which should be a big relief because earlier we were paying 275% taxes on petrol. Although price stability is important, for India, "there is enough empirical evidence to suggest that a 4% inflation rate is too low a target", wrote Prof VA Nageswaran. The Monetary Policy Committee (MPC) of the Reserve Bank (RBI) may have been too focused on inflation which may have affected growth of the economy, wrote Bhattacharya, Kwatra and Devulapalli. Governor of RBI Prof Raghuram Rajan's contract was not renewed because of his public comments and "growing frustration in the government, especially in the Finance Ministry that was led by Arun Jaitley at that time, about the RBI not bringing down interest rates in the economy", wrote Udit Misra. Rajan was replaced by Urjit Patel, who resigned, and retired IAS officer Shaktikanta Das was appointed Governor of RBI to "repeatedly cut the repo rate" as he was expected to do. Naturally, barring March 2020, inflation has stayed above 6% since December 2019 and growth has not picked up as well. Now the RBI is worried that interest rates have been cut too low and this is a threat to financial stability. A research paper from the RBI itself recommends that inflation target should remain at 4%. Because "Experts believe retail inflation is likely to average 6.3 percent this fiscal and mostly will remain sticky going forward owing to pick-up in demand across sectors." The accepted wisdom is that the RBI consistently  overestimates inflation by focusing on household inflation expectations which is based mainly on food inflation. Food and beverages constitute around 45% of the basket of items in the consumer price index (CPI), but since this is dependent on supplies, which depends on rainfall, it cannot be controlled by raising rates, which damages growth without controlling inflation. GST collection rose to a record high of Rs 1.15 trillion because of 27% increase in import duties, resulting from an increase in tariffs on imports. Naturally, when cost of imported goods rise, local manufacturers also raise prices, which increases tax collections. By concentrating on food and ignoring other household goods and services, it maybe that the CPI is underestimating rise in prices. After all, man shall not live by bread alone. RBI is right to be alarmed.