Reportedly retail inflation skyrocketed to 7.35 per cent in december 2019, registering a 1.81 per cent jump from november, showed official data released Monday. Meanwhile soaring vegetable prices, led by onions, were to blame for the inflation ambush that breached Reserve bank of India's upper limit (inflation) of 6 per cent last month. Furthermore Inflation has never been this high since July 2014, when it was marginally higher than december figure at 7.39 per cent. It has touched almost a six year high a worrying trend that reduces the possibility of an interest rate cut by bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india (RBI).
Perhaps since the central bank maintained an "accommodative" stance in its last policy review, there is a possibility of interest rates swelling as well. Rising interest rates are neither good for a reviving economy nor a demand-less market, especially when unemployment rate is higher than what it was four decades ago. Apparently it leaves the government with much to do as bank OF INDIA' target='_blank' title='rbi-Latest Updates, Photos, Videos are a click away, CLICK NOW'>rbi governor Shaktikanta Das already said that changes in inflation would dictate the Monetary Policy Committee's (MPC) next move.
Moreover members of Finance minister Nirmala Sitharaman's party, the bjp, have already announced that she will present a "pro-people" budget. Meanwhile, many industry leaders have urged the government to increase spending in labour-intrusive sectors like manufacturing, construction and real estate.
