{"id":266820,"date":"2023-10-28T19:10:18","date_gmt":"2023-10-28T13:40:18","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=266820"},"modified":"2023-10-29T19:52:38","modified_gmt":"2023-10-29T14:22:38","slug":"on-inflation-no-policy-for-troubled-times","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/on-inflation-no-policy-for-troubled-times\/","title":{"rendered":"On Inflation – No policy for troubled times"},"content":{"rendered":"\n

Source: <\/strong>This post on inflation has been created based on the article \u201cNo policy for troubled times\u201d<\/strong> published in Business Standard<\/strong> on 28th<\/sup> October 2023.<\/strong><\/p>\n

UPSC Syllabus Topic: GS Paper 3 Indian Economy and issues relating to planning.<\/strong><\/p>\n

News<\/strong>:\u00a0This article discusses the various reasons which have led to the current inflation scenario in the world.<\/p>\n

Read a detailed article on Inflation Management in India here<\/a>.<\/p>\n

What is inflation?<\/strong><\/h2>\n

Inflation refers to the rise in the prices of most goods and services of daily or common use such as food, clothing, housing, recreation, transport, consumer goods.<\/p>\n

It measures the average price change in a basket of commodities and services over a period of time.<\/p>\n

What is the current inflation scenario?<\/strong><\/h2>\n

The target for inflation in most advanced economies is 2%. However, inflation in the USA is at 3.7%, in the Euro area at 5.6%, and in Britain at 6.8%.<\/p>\n

In India, where inflation is typically much higher than in these advanced economies, it is hovering at 5%. India is not heavily indebted and showing good economic growth. This should give the RBI room to raise interest rates and aim for the 4% target.<\/p>\n

What are the current global challenges with respect to inflation?<\/strong><\/h2>\n

1) Global Economic Situation: <\/strong>The world is witnessing a global economic slowdown.<\/p>\n

2) Geopolitical conflicts: <\/strong>It has led to inflation in the oil market, and also in various food and other commodity markets.<\/p>\n

3) Climate-change<\/strong> imposes additional costs.<\/p>\n

4) Ineffectiveness of monetary policy:<\/strong> Due to the above factors, prices will rise even if demand is weak. Monetary policy in this situation will not be as effective.<\/p>\n

5) Twin-Balance Sheet problem:<\/strong> Banks and company balance sheets are getting stressed by debt becoming more costly.<\/p>\n

6) Lower Investments: <\/strong>Investment will get hit because it would have to deliver higher returns to match the higher cost of capital.<\/p>\n

Question for practice:<\/strong><\/p>\n

Inflation management has become a growing concern due to emerging challenges in the global economy. Explain.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: This post on inflation has been created based on the article \u201cNo policy for troubled times\u201d published in Business Standard on 28th October 2023. UPSC Syllabus Topic: GS Paper 3 Indian Economy and issues relating to planning. News:\u00a0This article discusses the various reasons which have led to the current inflation scenario in the world.… Continue reading On Inflation – No policy for troubled times<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,216,8184],"class_list":["post-266820","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-3","tag-indian-economy","entry"],"jetpack_featured_media_url":"","views":{"total":6,"cached_at":"","cached_date":1698536808},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/266820","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=266820"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/266820\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=266820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=266820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=266820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}