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Inflation

Inflation has been reduced to single digits from over 13% last year through RBI interest rate hikes. However, food prices continue to rise due to shortages, damage to food stocks, and black market operations. While India's 8.5% GDP growth may be sustainable due to government investment in infrastructure and incentives for foreign investment, high fiscal deficits, inflation, land acquisition problems, and corruption pose challenges to maintaining growth.

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Gaurav Gupta
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35 views2 pages

Inflation

Inflation has been reduced to single digits from over 13% last year through RBI interest rate hikes. However, food prices continue to rise due to shortages, damage to food stocks, and black market operations. While India's 8.5% GDP growth may be sustainable due to government investment in infrastructure and incentives for foreign investment, high fiscal deficits, inflation, land acquisition problems, and corruption pose challenges to maintaining growth.

Uploaded by

Gaurav Gupta
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Report on Inflation & GDP

Inflation
o o o o Cut the inflation from 13.73% to single digit. In double digit from last One year RBI has raised rates 4 times in this year Government Responsibility to manage our economy with prudence so that our development is not affected

For
y y y y y y RBI to check rates in every 45 days instead of quarterly Liberalised imports to meet the shortage of essential commodities Distribution of wheat and rice to states through an open markets sale scheme. Zero duty sugar imports and enhanced allocation of wheat for states. Ban on export of non-basmati rice, wheat and sugar. Raised Repo rate by 25 basis points and Reserve Repo by 50 basis points.

Against
y y y y y y y y Increase in the rate of petroleum product to cut the subsidy but it increased the burden on inflation Prices of food product are going up day by day. Food grains getting spoil in the FCI go-downs On Jan 1 this year, 10,688 lakh tonnes of food grains were found damaged in FCI go-downs. Highest rise in food grains and pulses rates. Monetary policy not able to reduce the rate on a large scale. Short supply is the cause for inflation Govt not able to cut down the black marketing of good.

PGDM 10-12

Batch C

Group 3

Report on Inflation & GDP

GDP
Is 8.5% GDP sustainable for growth? Yes it is sustainable

FOR
y y y y y Govt. Relaxing rules for FIIs and FDI to invest in India. Stimulus plans to recover from recession. Packages and subsidies to agriculture sector. Govt spending heavily on infrastructure to create environment for investment. Govt has declared SEZs after identifying some parts in the country to provide infrastructure to IT companies.

Against:
y y y y y Increasing Fiscal deficit which in turn increases burden on taxpayers Inflation is a cause of worry which is hampering the growth Problems in acquiring land in some parts of the country Competition from neighbouring countries like China Lack of Public distribution system in implementing various govt schemes and corruption in various govt agencies.

PGDM 10-12

Batch C

Group 3

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