With the rising level of inflation and the consecutive rise in the interest rate there is excessive money supply. To channelize this money supply there have to be strategies like enhancing capital formation in the agriculture sector and expanding micro credit. Banks can device innovative financial instruments with tax shelters to garner the invertibral funds of the rich.

It is not surprising to see a sudden spurt in prices all around in India. There should be no cause of alarm. This is because, India is also passing through the same phase of `Irrational Exuberance' as was experienced by the US in 1990s. Joseph Stieglitz (Nobel Prize in Economics) has very vividly and rightly brought this out in his book Roaring 90's.

In fact, in our societies dynamic changes are occurring both in social and economic activities. People are getting regrouped and reclassified very rapidly due to almost unbelievable changes in their education and earning. No longer can our society be classified in three or four groups' viz., Rich, Middle, Lower Middle and Poor or to add another class created by our politicians to suit their voting—a regrouping named Below Poverty Line. Due to sudden high rate of growth of economy and intellectual capital the income level and consequent demand for luxury goods and foods has also suddenly spurted. This obviously has created an imbalance in demand and supply and that has caused an obvious inflation.

It is quite natural that our middle and lower middle class people, who suddenly got wealth and/or very high salary which they perhaps will not have earned even in their lifetime, felt that this is the opportune moment to show them off by acquiring luxury goods and/or properties so that they could be classified as rich. But rich people generally try to remain in a closed society and prevent any new entry. This intensifies competition and results in `irrational exuberance.' It is strange that such an obvious feature is strangely overlooked by our policy-framers and operators. There is an urgent need to divert this irrational expenditure to some potent infrastructural expenditure and in building up some cushions to help the poor and middle class to venture into new and emerging trade and farming beside educating their children to become more and more confident and self-reliant.

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