Uncontrollable inflation has become a headache for RBI too, now how will Governor Shaktikanta Das be able to get rid of it to the general public?

Uncontrollable inflation has become a headache for RBI too, now how will Governor Shaktikanta Das be able to get rid of it to the general public?

According to a Bloomberg survey, retail inflation is expected to remain above the Reserve Bank’s upper circuit of 6 per cent in the second half of 2021. RBI says that there is a jump in inflation rate on an immediate basis due to supply side problem.

The Holes Price Index may remain at 10.71 percent in the July-September quarter.

Amidst the economic slowdown, the rising inflation rate is a big challenge before the Reserve Bank of India. According to the Bloomberg Economist Survey report, the second half of 2021 will see an uptick in retail and wholesale inflation, ie retail and wholesale inflation. According to the report, the Holes Price Index may remain at 10.71 percent in the July-September quarter. Earlier this estimate was estimated at 10.12 percent. The Economist has also raised the forecast for consumer inflation (retail inflation) to 5.7 per cent for the September quarter (July-September) and 5.2 per cent for the October-December quarter.

Apart from this, the GDP growth rate for the current financial year (2021-22) has been increased from 9 per cent to 9.2 per cent, while the Gross Value Added (GVA) has been reduced to 9 per cent. Coface’s Asia Pacific head Bernard Aw said retail inflation would remain outside the Reserve Bank’s 4 per cent range. He said that it will continue to rise before the January-March quarter 2022 and it can remain above the upper circuit of 6 per cent of RBI during this period.

RBI said rising inflation is an immediate problem

The Reserve Bank of India, while announcing the last monetary policy, had said that the rise in inflation in the country at this time is due to the problem of supply side. The main focus of the Reserve Bank at this time is on economic recovery and not on rising inflation rates. It believes that inflation rate is an immediate problem which will get corrected itself with time.

Retail inflation expected to be 5.1 percent

After the RBI MPC meeting in June, the retail inflation rate for the current financial year has been kept at 5.1%. Retail inflation is estimated at 5.2 per cent for the June quarter, 5.4 per cent in the September quarter, 4.7 per cent in the December quarter and 5.3 per cent in the March quarter. The Reserve Bank has set a target of 4 per cent for retail inflation. However, the window of +/-2 percent i.e. upper limit of 6% and lower limit of 2% has been kept.

Retail inflation crosses 6 per cent in May and June

India’s retail inflation rate declined to 6.26 per cent in the month of June. There has been some relief in this compared to May. Retail inflation stood at 6.30 per cent in May. Prior to that, for five consecutive months (December-April), the retail inflation rate was within the range of 6 per cent. The Reserve Bank of India has set a target of maintaining retail inflation with a target of 4 percent (+/-2%) for March 20206.

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