Not China or Pakistan, this is the biggest enemy of India's economy, the government is also worried - Newztezz Online

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Sunday, January 7, 2024

Not China or Pakistan, this is the biggest enemy of India's economy, the government is also worried


Although there are many enemies of the economy of any country, but there is one enemy which not only troubles the common people but also hinders the economic growth of the country. Because of which the government has to take such decisions, which impact the pockets of the general public. Let us also tell you who is that enemy...

Whenever the names of India's enemies are taken, the name of Pakistan comes at the top. After that, China is also being counted among the enemies of India. This enmity has continuously increased after the standoff with China in Galvan Valley. Even after that, if seen from economic point of view, neither Pakistan nor China is the biggest enemy of the country. The biggest enemy of India's economy is inflation. Due to which the government also seems to be quite worried. The government is also continuously working to reduce it. Let us also tell you what kind of warning the India Ratings Chief Economist has expressed regarding inflation and economy in the country.

Devendra Kumar Pant, Chief Economist of India Ratings and Research, said that the Indian economy is facing the challenge of low consumption growth. The important reason for this is inflation which is affecting the lower income group. While giving an interview to PTI, Pant said that although the country's economy now has the fighting capacity to deal with the double shock of below normal monsoon and high global oil prices, the challenge is to bring down inflation so that people can live comfortably. Have more money in hand for expenses.

What is the formula after all

He said that one percent reduction in inflation will increase GDP by 0.64 percent. Or there will be an increase of 1.12 percent in PFCE (Private Final Consumption Expenditure). If inflation can be reduced to one percent, it will be a win-win situation for everyone. PFCE reflects expenditure by individuals on goods and services for personal consumption. According to the estimates of Ind-Ra, a subsidiary of global rating agency Fitch Ratings, PFCE will grow at the rate of 5.2 percent on an annual basis in the current financial year, whereas in the last financial year this growth was 7.5 percent.

Economy will not be stable yet

Pant said that economic growth is driven by expenditure. Persistently high levels of expenditure on a year-on-year basis have created fiscal deficit and debt risks, which will keep interest rates high. Pant said that unless private companies start investing and the government withdraws some of the investments it is making, the economy will not see stable growth. The Indian economy grew at the rate of 7.2 percent in the financial year 2022-23. The government estimates that the growth rate in the current financial year will be 7.3 percent.

Inflation is high for the poor

Pant said that in terms of income group, there are two types of people in India – one is high income group people and the other is low income group people. The salaries of people at the lower levels of the pyramid are not increasing at the same pace as those of people in the organized sector or at the upper levels. He said that we have done a study and found that people from the bottom 50 percent have to face more inflation than the people from the top 50 percent. The prices of goods and services consumed mainly by the lower strata are rising faster than those consumed by the upper strata. Retail inflation has reached a three-month high of 5.55 percent in November, mainly due to the increase in food prices.

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