Inflation reduces purchasing power over time by increasing prices. It is measured as the annual percentage change in consumer prices. The Reserve Bank of India uses various monetary policy tools like interest rates, cash reserve ratios, and open market operations to control money supply and maintain price stability. High inflation is undesirable as it increases costs for consumers and businesses, but some inflation is necessary to avoid stagnation. The government can use fiscal policies and higher interest rates to combat high inflation.
India Economic Survey 2017 by Edelman IndiaAklanta Kalita
The Union Finance Minister Shri Arun Jaitley tabled the Economic Survey 2016-17 today, the first day of the Budget Session of the Parliament. The Economic Survey says that the adverse impact of demonetisation on GDP growth will be transitional and the economy will recover with remonetisation. The Survey states that once the cash supply is replenished, which is likely to be achieved by end of March 2017, the economy would revert to normal. The GDP growth in 2017-18, as per the survey, is projected to be in the range of 6¾-7½ percent.
The Survey suggests a few measures to maximise long-term benefits and minimise short-term costs. One, fast remonetisation and early elimination of withdrawal limits. This would reduce GDP growth deceleration and cash hoarding. Two, continued impetus to digitalisation while ensuring that this transition is gradual and inclusive, and appropriately balances the costs and benefits of cash versus digitalisation. Three, following up demonetisation by bringing land and real estate into the GST. Four, reducing tax rates and stamp duties.
India Economic Survey 2017 by Edelman IndiaAklanta Kalita
The Union Finance Minister Shri Arun Jaitley tabled the Economic Survey 2016-17 today, the first day of the Budget Session of the Parliament. The Economic Survey says that the adverse impact of demonetisation on GDP growth will be transitional and the economy will recover with remonetisation. The Survey states that once the cash supply is replenished, which is likely to be achieved by end of March 2017, the economy would revert to normal. The GDP growth in 2017-18, as per the survey, is projected to be in the range of 6¾-7½ percent.
The Survey suggests a few measures to maximise long-term benefits and minimise short-term costs. One, fast remonetisation and early elimination of withdrawal limits. This would reduce GDP growth deceleration and cash hoarding. Two, continued impetus to digitalisation while ensuring that this transition is gradual and inclusive, and appropriately balances the costs and benefits of cash versus digitalisation. Three, following up demonetisation by bringing land and real estate into the GST. Four, reducing tax rates and stamp duties.
Much is being expected from the first union Budget to be presented by the new UPA government’s Finance Minister, Pranab Mukherjee. The current slowdown has raised expectations among businessmen that this budget will do something to help the economy get back to its 8 per cent-plus growth rates. Meanwhile, the constant references to inclusive growth by various ministers have made most anticipate a huge increase in social sector expenditure. The fiscal situation is not particularly pretty, but there is a school of thought that says one can ignore fiscal deficits in order to promote economic growth. In theory, the Union Budget is supposed to be nothing more than a statement of the government’s proposed expenditure and revenues for the year ahead. In practice, many finance ministers have used the budget speech to signal policy changes and reforms. What will this year’s budget look like? Four senior economists and policy watchers — Pronab Sen, chief statistician & secretary, Ministry of Statistics & Programme Implementation, Omkar Goswami, chairman of CERG Advisory,Abheek Barua, chief economist, HDFC Bank and Laveesh Bhandari, director of Indicus Analytics, debated the issues before the government for over an hour and a half with BW’s Prosenjit Datta and Rajeev Dubey.
Karvy wealth - Advice for the Wise Report, November 2016sneha thakur
Advice for the Wise is a Karvy Private Wealth report of November 2016. This report is provided by Karvy wealth, this report will help you understand key investment components and thus will help you to take good decision in investment choices. For more information about this presentation log on to our website http://karvywealth.com
Knight Frank India Real Estate (Jan-June 2017) ReportD Murali ☆
Knight Frank India Real Estate (Jan-June 2017) Report
Knight Frank-17H1
Kanchana Krishnan, Knight Frank on 17H1 January-June 2017 India Real Estate
(Residential, office)
Blog post link: http://bit.ly/2upCz7K
This presentation shows a basic background on the monetary policy in Bangladesh showing the key features of the monetary policy introduced by Bangladesh Bank.
Much is being expected from the first union Budget to be presented by the new UPA government’s Finance Minister, Pranab Mukherjee. The current slowdown has raised expectations among businessmen that this budget will do something to help the economy get back to its 8 per cent-plus growth rates. Meanwhile, the constant references to inclusive growth by various ministers have made most anticipate a huge increase in social sector expenditure. The fiscal situation is not particularly pretty, but there is a school of thought that says one can ignore fiscal deficits in order to promote economic growth. In theory, the Union Budget is supposed to be nothing more than a statement of the government’s proposed expenditure and revenues for the year ahead. In practice, many finance ministers have used the budget speech to signal policy changes and reforms. What will this year’s budget look like? Four senior economists and policy watchers — Pronab Sen, chief statistician & secretary, Ministry of Statistics & Programme Implementation, Omkar Goswami, chairman of CERG Advisory,Abheek Barua, chief economist, HDFC Bank and Laveesh Bhandari, director of Indicus Analytics, debated the issues before the government for over an hour and a half with BW’s Prosenjit Datta and Rajeev Dubey.
Karvy wealth - Advice for the Wise Report, November 2016sneha thakur
Advice for the Wise is a Karvy Private Wealth report of November 2016. This report is provided by Karvy wealth, this report will help you understand key investment components and thus will help you to take good decision in investment choices. For more information about this presentation log on to our website http://karvywealth.com
Knight Frank India Real Estate (Jan-June 2017) ReportD Murali ☆
Knight Frank India Real Estate (Jan-June 2017) Report
Knight Frank-17H1
Kanchana Krishnan, Knight Frank on 17H1 January-June 2017 India Real Estate
(Residential, office)
Blog post link: http://bit.ly/2upCz7K
This presentation shows a basic background on the monetary policy in Bangladesh showing the key features of the monetary policy introduced by Bangladesh Bank.
What is Inflation and How to Beat Inflation 2024.pdfNazim Khan
Inflation Rate in India: Inflation is a crucial economic indicator that affects every aspect of a country’s economy, including the purchasing power of its citizens, investment decisions, and overall economic stability. In India, like many other countries, inflation plays a significant role in shaping monetary policies and influencing consumer behavior.
To calculate one’s purchasing power, inflation is essential. To put it another way, inflation is a phenomenon that raises costs for products and services over time, making consumers feel the squeeze when it comes to their own finances, especially with regard to spending and purchasing patterns.
For example, let’s assume you spent INR 1,000 last month on a list of essentials for your home, but this month the cost increased by INR 1,100 since the price of a particular food item on the list went up. This is an example of inflation in action. You might have to pay more to purchase the inflated-priced item or delete one from your basket, which could have an impact on your monthly spending plan.
Thus, inflation is the result of any factor that drives up the cost of products and services on the market and disturbs consumer demand. According to economists, the economy will grow at a baseline if inflation is controlled to encourage spending. On the other hand, low inflation, often known as deflation, is also concerning. High inflation, on the other hand, is a sign that an economy is having significant problems.
What is inflation? Inflation Meaning
In simple terms, inflation refers to the sustained increase in the general price level of goods and services over a period of time. It means that, on average, consumers need to spend more money to purchase the same basket of goods and services. Inflation is often measured as an annual percentage increase in the Consumer Price Index (CPI) or the Wholesale Price Index (WPI).
The Consumer Price Index, or CPI, examines retail inflation of goods and services across 260 categories in the economy. The change in prices at which consumers purchase things is taken into account in CPI-based retail inflation. The Ministry of Labor and Statistics and Program Implementation gather the data independently from each other.
The Wholesale Price Index, or WPI, examines the inflation of only goods across a range of 697 categories. The change in prices at which customers purchase goods at a wholesale price or in bulk from factories, mandis, etc. is taken into account by the WPI-based wholesale inflation.
India’s Average Inflation Rate for the Previous Year: Inflation Rate in India
The consumer price index (CPI), which is used to monitor retail inflation in India, increased to 5.69% in December 2023 from 5.55% in November 2023, as per the most recent statistics released by the Ministry of Statistics and Programme Implementation. May 2023 saw the lowest CPI of 2023, at 4.25%. The CPI peaked in April 2022 at 7.79% and peaked in January 2021 at 4.06%.
The WPI, which determines the total co
MAJOR EVENTS THAT AFFECTED THE STOCK MARKET.pdfSRIKANTA NAYAK
Trading just on company-specific information might not be sufficient for a market participant. Understanding the events that affect the markets is also crucial. The performance of stocks and markets in general is significantly influenced by a variety of external factors, including economic and/or non-economic events.
RELATED: - WHAT ARE CORPORATE ACTIONS AND HOW DO THEY AFFECT STOCK PRICES? - theindusa.com
HOW TO BECOME A DISCIPLINED TRADER? - BEST SOLUTION. - theindusa.com
Monetary Policy
The Reserve Bank of India (RBI) uses monetary policy as a tool to manage the money supply through regulating interest rates. They adjust interest rates to do this. India's central bank is called the RBI. The central bank of every nation on earth is in charge of deciding on interest rates.
The RBI must achieve a balance between growth and inflation while determining interest rates. In a nutshell, if interest rates are high, borrowing costs are also high (especially for businesses). Corporate expansion is impossible if borrowing is difficult. If businesses don't expand, the economy sputters.
On the other hand, borrowing is simpler when interest rates are low. This results in both businesses and consumers having more money. Increased spending results from having more money, thus retailers tend to raise prices, which causes inflation.
The RBI must take into account all the variables and should cautiously fix a few key rates in order to achieve balance. An economic upheaval can result from any imbalance in these rates.
The following are the important RBI rates that you should monitor:
Repo Rate - Banks can borrow money from the RBI whenever they need to. The repo rate is the interest rate at which the RBI loans money to other banks. A high repo rate indicates a high cost of borrowing, which results in a sluggish expansion of the economy. In India, the repo rate is at 8%. Markets dislike the RBI's decision to raise the repo rate.
Reverse repo rate - The rate at which the RBI borrows money from banks is known as the reverse repo rate. Banks are happier to lend money to RBI than to a business since they are confident that RBI won't default when they do so. However, the amount of money in the banking system declines when banks decide to lend money to the RBI rather than the corporate entity. Reverse repo rate increases tighten the money supply, which is bad for the economy. The current reverse repo rate is 7%.
Cash reserve ratio (CRR) – Every bank is mandatorily required to maintain funds with RBI. The amount that they maintain is dependent on the CRR. If CRR increases then more money is removed from the system, which is again not good for the economy.
The RBI meets every three months to discuss rates. The market keeps an eye out for this important occasion. Interest rate-sensitive stocks from a variety of industries, including banks, automobiles, housing finance, real estate, metals, and others, would be among the first to respond to rate changes.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
#money
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
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how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
1. INFLATION
THE MOST INIQUITOUS TAX
ABV-INDIAN INSTITUTE OF INFORMATION
TECHNOLOGY AND MANAGEMENT
GWALIOR-474 015
Submitted By:
Irita Mishra
Kartikay Randev
Shaheen Ansari
Supratik Deb
2016
2. In economics, ‘Inflation’ means a sustained increase in general price of goods and
services in an economy over a period of time. But for any person living in that economic
situation, it implies the reduction in purchasing power per unit of money or currency, to
be specific. In other words, it can be referred to as a loss of real value in the medium of
exchange and unit of account within the economy. A chief measure of quantifying
inflation is the inflation rate which is basically the annualized percentage change in a
general price index over time which is usually the consumer price index. Also, increase
in the price level erodes the real value of money with an underlying monetary nature. A
debtor having fixed nominal rate of interest will see reduction in the real interest rate as
the inflation rate rises. In terms of taxation policies of the Government, inflation is an
indirect effect of it. For example, tax cuts have the probability to slow down economic
growth by increasing budget deficits. Moreover the effects of budget deficits was well
seen in the year 1974 by the Indians i.e. the post war scenario of 1971. The average
inflation rate was as high as 28.54%.
Put in simple words, inflation is the phenomenon through which average prices of goods
and services rise over time for a certain period. It is measured on a monthly basis and
then averaged for twelve months.
The monetary authority of India i.e. the RBI, controls the complete supply of money
through interest to maintain the price stability and economic growth. Price Stability
implies promoting economic development with considerable emphasis on price
constancy. One of the most important functions of RBI is controlling the expansion of
bank credits and money supply with proper attention to seasonal requirement for credit
without affecting the output. The instruments of monetary control implemented by the
RBI are enunciated here. RBI offers the Government securities for the control flow of
credits and buys the Government securities to increase credit flow. Higher the Cash
Reserve Ratio (CRR) with RBI, lower will be the liquidity in the system and vice versa.
RBI is empowered to vary CRR between 15 % and 3%. The bank rate also known as
the discount rate, is the rate of interest charged by the RBI for giving funds or loans to
the bank system. Funds are provided either through lending directly or discounting or
buying money market instruments like commercial bills and treasury bills. Repo rate is
3. the rate at which RBI lends to its clients generally against Government securities.
Reduction in Repo rate allows the RBI to get money at a cheap rate and increase in
Repo rate discourages the RBI to get money as the rate increases and becomes
exclusive. Reverse Repo rate is the rate at which RBI borrows money from the
commercial banks.
All of these authorities are a mixed outcome for multi-asset investors. The central banks
are searching for even more diverse and creative solutions to achieve their mandates.
The experimentation with “treasure” policies will continue for long as RBI faces the limit
of a lower bound on policy rates. One thought that has achieved traction is the direct
monetization of fiscal stimulus by RBI (i.e., helicopter money). Economist and market
players point to a magnificent shift in emphasis between inflation and growth of Indian
economy. The RBI is unexpectedly cutting rates to show to the consumer that inflation
is decreasing.
The Government of India influences the expenditure of its citizens through its fiscal
policies and collects revenue mainly through taxes. Inflation has led to the toppling over
of the dominoes of aggregate demand, level of economic activity and economic
distributions. In times like these when inflation has reached a new peak, it is the fiscal
policies that hold the key to easing out the trepidation of the masses. The Government
has been trying to sculpt a robust framework of trade, finance, transport,
communications and real estate since private consumption and internal demand are the
main drivers of growth in the country. This can be explained by acknowledging the
importance of satisfying structural demand and unlocking large scale infrastructure
projects.
The "Make in India" program launched by PM Narendra Modi focuses on tilting the
economies towards regional and domestic demand, rather than relying on exports. It is
a great step towards opening the gates of India for business and assuring increased
trust of the World Bank. Since each Government lives off its supporters' votes, price rise
is the single most important factor that concerns the citizens with regard to inflation. To
them, all other factors branch out as sub-influences. An inflation targeting policy with a
supportive fiscal stance is urgently needed in the country. Explicitly taking into account
4. the impact of inflation on the incomes and costs of commodities is the first step in the
right direction. Containing unproductive responses through "Minimum Government and
Maximum Governance” seems to be the next step. Curbing the off-shoring of black
money and dealing with supply bottlenecks is another brilliant step in the way. A
comprehensive framework needs to be formulated by the Government in dealing with
the devil of inflation.
No one is happy when they get that dreaded mail from the Income tax department,
urging everyone to pay their share of the taxes before the end of the financial year. In
times like these, the New Pay Commission doesn't mean that you're richer because
your purchasing power doesn't actually increase. Inflation leads of weakening of the
Rupee. In the end, your earnings are worth the same as they always were. Moreover,
you end up paying more since the Income tax department hasn't factored in the effect of
inflation on the tax brackets. Who knew that the direct tax also had a hidden
component, namely inflation? A salary hike from the 20% tax bracket to 30% might
make you feel richer but increase in the customer price index (CPI) means that your
elevated income has been chewed away by inflation.
An asset bought at ₹3 crores in 2000 may be selling at double the value in 2016. An
organisation may believe that this is monetarily advantageous for it. But the fact is that
the value of Rupee has fallen in 16 years. Increase in the market value of the asset
does not mean an increase in its intrinsic value. The exchange rate was around ₹45 per
dollar in 2000 while it oscillates around ₹70 now. Indian companies are hence at a loss
in the foreign market because an investment of ₹1 crore equals a reduced amount
worth US $70,000 which is the income of a typical middle class American household.
An unwanted export slump, falling input prices, escalating labour wages and an
increasing cost base have been latently instrumental in tying the hands of these
corporations and making them helpless under the wrath of inflation. The Government
has tried to compensate higher import rates and unbalanced cycles of supply and
demand with higher interest rates but inflation has taken a serious toll, especially on the
relatively small businesses across the country and beyond its borders.
5. High inflation is highly undesirable for the people in the economy. It reduces your
purchasing power and makes you spend more for smaller quantities and all these
happen due to increase in expenditure in the economy. But on the contrary, inflation is
also necessary or else stagflation may come into play which is highly infectious to the
economy of a nation. Growth of the country will be in an undecipherable hiatus. So,
there should be a controlled situation in the economy. Now, the instruments that the
Government can use to control the inflation rate are the high interest rate, high reserve
requirements and selling out Government bonds. Each of them has a different style of
impact over the purchasing power of the people.
Situations can be similar to these three types:
1. Banks borrow money from the Government at the rates fixed by Reserve bank of
India which means the banks will lend money at a higher rate. So if RBI
increases the interest rates, the banks will also follow and hence very few people
will intend to borrow money from any bank. This will directly impact the spending
money; prices will fall and hence lower the inflation.
2. Banks must maintain certain amount of cash in reserve to cover withdrawals. So,
technically, more the reserve a bank holds, fewer is the amount it will lend to
people. Ultimately consumers borrow less and spending slows.
3. Finally the Government can call in the debts that are owed or increase the
interest a bond pays, so more investors will buy them. Both of the tactics take
cash from the pockets of the bank whether it is an investor or a company. This
brings cash back to the Government and makes it stronger in cash reserve.
Government and Reserve Bank of India conjointly have the power to execute these
tools which can be termed as ‘Contrary Monetary Policy’.
In 2008, a situation arose in USA when the economy was overcome with low Gross
Domestic Product (GDP) and high prices of commodities. People were losing their
purchasing power when the Government came forward with a new act i.e. The
6. Economic Stimulus Act of 2008. According to this act, citizens of USA were given a sum
of $600 each and $200 for each couple separately so as to boost the purchasing power
of the people. The act actually helped the Americans to come out of their misery. In
short, high inflation has the potential to destroy an economy and ingenious actions like
this one help the suffering country in unfathomable ways. A similar situation was faced
by India too during the post war scenario of 1971. India had seen an inflation rate of
28.5% then (highest in the nation’s history). That situation was due to the deficit created
by borrowing of money for war purposes. The Government controlled the situation and
recovered with time. Another such situation was expected to arise after
‘Demonetization’ in India. But this time, it was about lowering the inflation. When RBI
clearly announced in the bimonthly report of its meeting on December 7th that the
interest rates will be unchanged, it clearly executed its power and control over the
economy of the nation.
Inflation affects all sections of the society and the market too. But it affects the poorest
the most because they are the most handicapped in dealing with inflated prices as
compared to the richer sections of the society. Inflation consequences in the most
inequitable distribution of income. It is a regressive tax and is hence aptly called the
most iniquitous tax of all.