Deflation can be controlled by using various monetary policy measures. Quantitative easing, cutting tax rates, lowering interest rates, open market operations, lowering bank reserve limits, increasing spending by the Government are the ways in which deflation can be controlled. You can read about the Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes] in the given link.
- RBI – Know About Reserve Bank of India, Functions, Composition
- Monetary Policy Committee (MPC) – An Overview, Instruments of Monetary Policy