Taming inflation

The RBI today announced steps to curb the money supply in the system by announcing a 50 basic point increase in the CRR to 8.75%. This hike would be in two stages 25 basis points from july 5 and another 25 basic points from july 19. The repo rate has also being hiked by 50 basis points to 8.5%. This is likely to suck of over Rs 60,000 crores from the system. The move would have impact on the economic growth of the nation as the cost of funds is going to increase.
I feel that the govt missed the bus and is now desperate to take short term measures to cut inflation. The fact that no steps have been announced where in it shows that the govt has in mind to keep infalation under control in the long term surprises me. Everytime the govt meets on ways to curb inflation i hope for the same but in vain.
Here are some of my views to curb inflation over the long term.
Lets ananlyze what are the major concerns today. The very first one rising crude prices and with it depreciating ruppee. Both quite out of the control of the govt. So what can be done. We need to promote alternative sources of fuel and energy to cut down the requirement for crude over the longer term. Steps need to be initiated to promote green energy like solar power, wind energy and hydel power. Sources for all these are in abundance here. But no steps have been announced till date on these fronts. Have we ever analysed that kind of fuel we are burning in traffic jams. I think a study on these can be an eye opener for the policy makers. Why not promote buidling highways, bridges to cut down travelling time and thus fuel consumption. Many would argue that the govt does not has enought funds. Here the answer is private public relationship.
Steps need to be taken to promote fuel effecient vehicles. The recent increase in taxes on larger engines sounds funny. Why not classify vehicles as fuel effecient and inefficient ones. Then levy heigher taxes on ineffecient vehicles giving the manufacturers clear signals that they have to move to an effecient regime.
Crop planning is another area where the govt needs to take a look. IN one year we have a bumper crop which may be followed by a shift in farming and the very next year we are scarce in that very product. A planning of the areas according to their suitablity to the crop could not only help in keeping prices under control but also lead to heigher yeilds per acreage helping the farmer as well as controlling inflation.
What the govt seems to be doing today is just short term moves to prepare for the elections. Hope somebody is listening.