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The Rising trend of Inflation

The Rising trend of Inflation
By Arpit Sharma
We all have either heard about or been a part of the discussion which is going on in today's scenario related to the current economic slowdown. As we all know that our country is about to enter Recession and is sitting on pile of huge fiscal deficit. A lot of NBFCS are also making huge losses, GDP of India is the least in the last 11 years and now the latest problem of rising inflation has also knocked our door.
Some of the country's senior citizens are dependent upon the interest on their fixed deposits as their source of income, which according to them, will fetch a satisfactory amount in the future. But they might have not taken inflation into consideration before depositing their money in a bank FD account. For instance in today's scenario the interest on fixed deposit in a bank is approximately 7" and taking into consideration today's inflation rate which is approximately 7359, the inflation will eat up the interest rate and surprisingly the story doesn't end here Over the inflation rate, there is tax levied on fixed deposits if your income is more than 10% of the amount deposited. So all in all it would be a bad deal for the senior citizens.
 We know that the inflation is high but what we forget to notice is that the core inflation is actually decreasing, it's the headline inflation which is rising Core inflation per say reflects the overall inflation excluding some items which are food and fuel. But headline inflation shows us the picture of overall inflation including the prices of food and fuel which are very much volatile in nature. The current inflation is high because of the increasing prices of food and fuel. As we know recently the prices of Onion were very high due to excess of rainfall in Karnataka, hoarding etc. And the price of fuel is rising because of the US-Iran temos All these reasons are temporary in nature.
 People are blaming the RBI for this rising trend by saying that RBI should have taken proactive measures against rising inflation.But controlling the current rising trend of inflation has very less to do with RBI and more to do with the Government of India by controlling the prices of food and fuel with the help of subsidies and the reduction in tax rates

As the rising inflation is temporary in nature there is nothing much to worry about. The upcoming Fiscal policy or the so called Budget will tell us the strategy of the Government to deal with the rising trend of inflation and the economic slowdown.
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