Conclusion It can, therefore, be concluded that second round effects of food inflation are highly significant in the case of India. These second round effects occur as inflation expectations are not anchored. This calls fora renewed and vital role of the Reserve Bank of India in anchoring inflation expectations of the households through effective communication and transparency. In addition, failure of monetary policy in influencing the headline inflation in the short and medium run, warrants the need to revitalize the transmission mechanism of monetary policy in India.
