- Monetary measures- Classical economists are of the view that inflation can be checked by controlling the supply of Some of the important monetary measures to check the inflation are as under:
- Increasing Bank rate
- Sale of government securities/Open market operations
- High Reserve ratio
- Issue of new currency
- Fiscal measures- Measures taken by the government to control inflation.
- Decrease in public expenditure- One of the main reasons of inflation is excess public expenditure like building of roads, bridges Government should drastically scale down its non essential expenditure.
- Delay in payment of old debts: Payment of old debts that fall due should be postponed for sometime so that people may not acquire extra purchasing power.
- Increase in taxes: Government should levy some new direct taxes and raise rates of old taxes.
- Over valuation of money: To control the over valuation of money it is essential to encourage imports and discourage exports.
- Other measures
- Expansion of output
- Encouragement to saving
- Overvaluation
- Proper wage policy
- Indexing
- Population control
- Rationing