Inflation in India: Inflation, especially food inflation, remains a matter of concern for the government and the Reserve Bank of India. On Monday, July 29, 2024, the government told Parliament that the persistent high level of inflation can have an impact on the country’s financial health, which can affect the cost of funds, credit growth, exports becoming expensive and the purchasing power of the country’s large population. The Finance Ministry has said this in response to a question in the Lok Sabha.
Inflation affects the financial health of countries
Lok Sabha MP Yashwant Desai asked the Finance Minister a question during Question Hour about inflation and financial health in the country. He asked the Finance Minister, is it true that inflation has a negative impact on the financial health of any country. He asked the Finance Minister for the details of the inflation rate figures in the last five years along with the steps taken by the government to control it. In a written reply to this question, Minister of State for Finance Pankaj Chaudhary said, inflation in any country remaining at a high level can have a bad effect on its financial condition. He said, the effect of high inflation affects the domestic cost of funds, credit growth, expensive exports and the purchasing power of a large population.
The government took several decisions to control inflation
The Minister of State for Finance said, the Government of India has taken several steps to control inflation, which include strengthening the buffer stock of essential food items, releasing food items in the open market, selling rice, flour, pulses at subsidized prices in special outlets and simplifying the import of essential food items by rationalizing taxes. He said that the government has imposed stock limits to prevent hoarding and it is being continuously monitored. Pankaj Chaudhary said, to control inflation, the government has also reduced the prices of petrol, diesel and LPG.
Inflation rate above RBI’s tolerance band
Giving information about the inflation rate figures in the last five years, the Minister of State for Finance said that the inflation rate was 4.8 percent in 2019-20, 6.2 percent in 2020-21, 5.5 percent in 2021-22, 6.7 percent in 2022-23 and 5.4 percent in 2023-24.
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