India is not Turkey, but......

"Many people in Turkey are facing increased hardship as prices of food and other goods have soared," AP. "The Turkish government says inflation rose 20% in October compared with a year earlier, but the independent Inflation Research Group, made up of academics and former government officials, put it close to a stunning 50%." Last month, the Turkish central bank cut interest rate to 16% from 18%, Nikkei. The Turkish lira weakened by nearly 3% on the news. Turkey's President Recep Tayyip Erdogan is directly responsible. He has been pressuring the central bank to keep interest rates low. In May 2018, he criticised high interest rates and "described them as the 'mother and father of all evil', triggering a fresh slide in the lira as investors worried about the central bank's ability to rein in high inflation", Reuters. "Erdogan has replaced the central bank chief three times in less than two and a half years and dismissed three members of the bank's monetary policy committee....including two deputy governors." Higher prices mean lower buying power of the currency. "Turkey's currency, as a result, hit an all-time low of 10 against the dollar...and has lost some 25% of its value since the start of the year. That is driving prices higher, making imports, fuel and everyday goods more expensive." "I bought a 5-litre can of (cooking) oil, it was 40 lira. I went back it was 80 lira," said Kadriye Dogru. "We don't deserve this as a nation." In India, retail inflation rate was a comfortable 4.48% in October because if minimal rises in food prices, NDTV. but, "Wholesale inflation climbed to a five- month high of 12.54% in October on the back of a rise in prices of fuel and power, vegetable oils and chemicals, government data showed," ET. Taxes on fuel were raised to finance government deficit. "The total incidence of taxes on petrol has come down to 50 percent and that on diesel to 40 percent following a reduction in excise duty by the central government," ET. However, the Reserve Bank of India (RBI) has kept interest rate below the rate of inflation, at 4%, since 22 May 2020, HT. The rise in the consumer price index (CPI) may have been at 4.48% but, "Prices of nearly half the items used to compute India's retail inflation are rising at alarming rates of more than 6% a year," Mint. For the last 4 months, even as CPI inflation has stayed between 4.39% and 5.59%, prices of 45-48% of items in the CPI basket grew by over 6%. Prof Raghuram Rajan decided not to reapply for extension of his post as governor of RBI in 2016 because of shabby treatment by the government, Insider. Following him then Governor of RBI Urjit Patel resigned prematurely because of 'disagreements' with the government, BBC. Within a few of months of Patel, Deputy Governor Viral Acharya resigned 6 months before his term ended, ET. It is not all gloom, though. The government reappointed present Governor Shaktikanta Das for another 3 years, NDTV. Presumably for his sterling service in keeping interest rate below the rate of inflation. Why are we trying to be like Turkey? Do we think we are immune?