INDIA Inc’s plea to not increase interest rates is not a solution to the rising cost of living. Nevertheless, even if RBI considers not to do the same INDIA Inc is going to face demand to raise wages from the bottom at the end of the financial year in March.
The issues involved, actually there is only one, rise in the cost of living. Since INDIA is relying on domestic demand, imports over exports, is a sign, it is not that hard to decide between who’s actually in need, though the need may not be dire and exploitation of the more in need may be other way around. But since our economy’s vision is to mitigate poverty and improve living conditions of the more dependent ones RBI may consider their demand or i think confrontation is the another way.
And, to avoid this one RBI and Government, in tandem, should start working on the issue, high-inflation
The speed with which inflation goes up and down it will almost take more than a year to get it at the targeted level of 5-6%. The expectation arising out of this situation says that the RBI will take further steps to take inflation at the level, desired.
The government can help RBI if it facilitates supply of real goods and services (G&S).
One possible action could be the opening of the import with a stronger Indian currency.
RBI's moves (decreased money-supply) could be supplemented by reducing import duties and a stronger rupee. After-all, it is the real availability of G&S that adds to real WELFARE and some times a stronger currency also works.
INDIA imports more than it exports and in international- trade deficit in Balance of Payment (BOP) is always disequilibrium.
Any central bank does not work for a class it works for the economy and especially for the poor in the economy, the dependent ones. Wages and prices are flexible upwards and are relatively rigid downwards.
This kind of behavior is best explained in ECONOMICS by Duesenberry-Doctorine or the Ratchet-effect.
According to the Deusenberry-Hypothesis, “…in the matter of consumption, an individual is not merely influenced by current consumption, but also by the standard of living he has enjoyed in the past…”
The issues involved, actually there is only one, rise in the cost of living. Since INDIA is relying on domestic demand, imports over exports, is a sign, it is not that hard to decide between who’s actually in need, though the need may not be dire and exploitation of the more in need may be other way around. But since our economy’s vision is to mitigate poverty and improve living conditions of the more dependent ones RBI may consider their demand or i think confrontation is the another way.
And, to avoid this one RBI and Government, in tandem, should start working on the issue, high-inflation
The speed with which inflation goes up and down it will almost take more than a year to get it at the targeted level of 5-6%. The expectation arising out of this situation says that the RBI will take further steps to take inflation at the level, desired.
The government can help RBI if it facilitates supply of real goods and services (G&S).
One possible action could be the opening of the import with a stronger Indian currency.
RBI's moves (decreased money-supply) could be supplemented by reducing import duties and a stronger rupee. After-all, it is the real availability of G&S that adds to real WELFARE and some times a stronger currency also works.
INDIA imports more than it exports and in international- trade deficit in Balance of Payment (BOP) is always disequilibrium.
Any central bank does not work for a class it works for the economy and especially for the poor in the economy, the dependent ones. Wages and prices are flexible upwards and are relatively rigid downwards.
This kind of behavior is best explained in ECONOMICS by Duesenberry-Doctorine or the Ratchet-effect.
According to the Deusenberry-Hypothesis, “…in the matter of consumption, an individual is not merely influenced by current consumption, but also by the standard of living he has enjoyed in the past…”
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