Has high inflation become intractable?

    As high inflation continues for an extended period, interest rates are expected to be raised further. The central bank's attempt at tamping down inflation through tighter monetary policy is understandable.

   Reform efforts at bringing in foreign direct investment into food and multi-brand retail have gone nowhere. If sweeping reforms were enacted swiftly, multinationals would be willing to invest heavily in the retail sector.If that happens,is the underlying infrastructure prepared to take advantage of fresh investments that may stream in? The answer is mostly, no. Apart from shortcomings with the road and rail network, stories about severe electricity shortages like this are not hard to find across India. Steps to enhance the road network are announced every once in a while. The actual progress however, has been frustratingly slow.

   Then there are factors beyond the control of India's government. Crude oil prices after reaching a high of more than $110 earlier this year have moderated. If the world economy returns to trend rates of growth, prices of commodities could spike again. This would make life harder for policy makers in India.

    In the absence of adequate steps to address India's chronic supply side bottlenecks, this may be a lost cause for the foreseeable future. Meanwhile,shocking levels of food wastage and malnutrition among millions of underprivileged will continue to blight the country. Not to mention other side effects,namely higher wages and slowing growth driven by higher inflation.