Steps to be taken during inflation

[vivgrn]

I want to know the steps that are to be taken during inflation.
From what i have read the steps is to check the money supply that is there in the markets so that demand is not excess of the supply.

MY point here is that it is not the money supply that is to be blamed( iam specifically saying in reference to the condition in India).
If the money supply is taken away from the markets, the poor will suffer.
Right now they do not have money for 2 square meals, what would happen if the money supply related to them is pulled now.
From my own experiences, it is the trickle down effect that has increased Indian living standards in the recent past.
If there is some differential treatment exercised with the government, then already the taxation policy is a burden. If the government further increases the taxes, and as the elections draw nearer, it would be a goodbye for the ruling party.
What should be the steps that should be taken now? by the central bank and the government.?

[asianeconomist]

In my country, where inflation is rampant too, the government has taken a few direct intervention measures to protect those who are most affected by the rising costs (people with fixed incomes, low-income households). Firstly, they have opened up "discount" shops where they only sell rice (the staple diet) at a much reduced price. Secondly, they have opened up super-market type shops where they sell everything at a sharp discount.

In the macroeconomic context, government has done some restructuring of the budget, by increasing taxes on certain luxury items and directing more subsidies towards farmers.

[anon]

Originally Posted by vivgrn

I want to know the steps that are to be taken during inflation.
From what i have read the steps is to check the money supply that is there in the markets so that demand is not excess of the supply.

MY point here is that it is not the money supply that is to be blamed( iam specifically saying in reference to the condition in India).
If the money supply is taken away from the markets, the poor will suffer.
Right now they do not have money for 2 square meals, what would happen if the money supply related to them is pulled now.
From my own experiences, it is the trickle down effect that has increased Indian living standards in the recent past.
If there is some differential treatment exercised with the government, then already the taxation policy is a burden. If the government further increases the taxes, and as the elections draw nearer, it would be a goodbye for the ruling party.
What should be the steps that should be taken now? by the central bank and the government.?

What do you think is the reason for inflation in India in the first place?

[Smileysquared]

Originally Posted by vivgrn

I want to know the steps that are to be taken during inflation.
From what i have read the steps is to check the money supply that is there in the markets so that demand is not excess of the supply.

From my experience to see if the money supply is really posing a risk to the economy one would examine the ratio of money supply to GDP over time. If it is increasing then you have a problem. The main reason all over the world for the rise in inflation has been due mainly to a rise in oil and food prices. I clearly remember that India was awaiting the monsoon rains to help boost their agriculture supply. If the supply of food commodities increases then it should help to lower prices. India is also planning to bring on stream nuclear reactors to help lower electricity prices in light of the rise in oil, gas and coal prices.