India is Awakening...


In the month of July 2022, the rate of inflation based on the Consumer Price Index has come down to the lowest level of 6.71 percent in the last 5 months in India, it was 7.01 percent in the month of June 2022. The main reason for this is the fall in the inflation rate of food items. However, the inflation based on the Basic Consumer Price Index has come down to the lowest level of the last 10 months i.e. 5.79 percent. The rate of inflation has improved in both rural and urban areas in the month of July 2022 as compared to the month of June 2022. It can be a matter of joy for all of us Indians that the improvement in the rate of inflation in India has actually been possible due to the improvement in the supply of goods.



That is, earlier the supply side factors were responsible for 65 percent of the reasons for the ever - increasing inflation in the country, which has now come down to 58 percent. There has been a lot of improvement in the supply of goods in India and now since the availability of goods has increased on time, due to which the rate of inflation has also decreased. At the same time, there has been some reduction in supply disruptions at the global level. Due to this, the effect of demand related factors in increasing inflation has increased to 40 percent.

However, there has been a decline in the rate of inflation in India between April and June 2022. However, there are still some states in India in which the rate of inflation has remained above 7 percent in July 2022. Out of total 23 states of India, 15 states have inflation rate above 6 percent (21 states were included in this category in April 2022 month) and 8 states have inflation rate below 6 percent. The rate of inflation in the state of Telangana was the highest i.e. 8.58 percent in July 2022, which has come down from the level of 10.05 percent in June 2022.


Inflation (inflation) has started increasing very rapidly in India as well as in other countries after the corona epidemic. In the US and many developed countries, inflation based on the Consumer Price Index has reached 9 percent, which is the highest rate of inflation in the last 50 years.






In the times to come, in India, the rate of inflation is expected to come down further and it is expected to remain below 5 percent in March 2023. Crude oil prices have started softening in the international market. However, the rate of import inflation, due to the continuous strengthening of the US dollar and the continuing weakening of the Indian rupee, is preventing the rate of inflation in India from coming down sharply.


Repo rate is being increased continuously by the Reserve Bank of India through monetary policy so that the citizens of the country are attracted to save more and cut their expenses and there is less demand for products in the market, which reduces the rate of inflation. Are. However, this is considered a negative measure as the loans used by the citizens, due to rising interest rates, tend to take a toll on their pockets, Due to which they are forced to cut down on the purchase of other goods and thus the demand for the goods is reduced. But on the contrary, if the supply of goods is improved, the availability of goods is increased so that the increased demand can be met, then it is considered a positive measure. And, only positive factors are more responsible for the decrease in the rate of inflation in the month of July 2022.


There is no description of the word inflation in the history of ancient India. Because, through cottage industries in rural areas, goods were produced in abundance and the supply of goods was always ensured, hence the imbalance in demand and supply was not allowed to arise. Rather, it is described in the scriptures that since the availability of goods was in abundance, the prices of goods kept on decreasing. By adopting this method all over the world including India, the demon named inflation can be controlled.


Secondly, the continuous increase in interest rates increases the cost of credit of the borrowers and consumers and adversely affects their profitability, which increases the pressure on these companies and consumers and this directly affects the economic development of the country. can be affected in the opposite way. Therefore, raising interest rates also has its limits. For this reason, it is said that if inflation is to be brought under control, then sometimes the growth rate may have to be compromised.


Due to the increase of 140 points in the repo rate by the Reserve Bank of India so far, an additional burden of Rs 42,500 crore is being expressed on the micro, small and medium and retail consumers, in the form of interest. Otherwise this class could have spent such a huge amount on the purchase of goods and now both the demand and production of these goods would be less.


In fact, with the aim of controlling inflation in America and European countries, interest rates are being increased continuously, due to which investments made by American institutions and other developed countries in developing countries are being invested in American and European markets. Due to which the currencies of these countries are coming under heavy pressure and the market price of US dollar is increasing continuously. Due to the devaluation of the currencies of developing countries, imported goods are becoming expensive in these countries, due to which the rate of imported inflation is increasing in these countries. International factors are more responsible for the rise in inflation in India. The internal situation has been controlled to a great extent by the Central Government and the Reserve Bank of India.


Demand can be reduced for some time by raising interest rates. Also, when the market is functioning as perfectly competitive, only then can the demand for goods be increased or decreased by changing interest rates through monetary policy. But, if inflation is to be controlled in the long run, more attention is needed on the availability of commodities. Therefore, inflation can be successfully controlled at the global level through India's antiquated economic policies.