April 04, 2017 @ 01:15 PM

Inflation Is Result Of Government's Apathy

Rising inflation is the big cause of concern for the country and its economic growth. The sufferers are mainly the taxpaying individuals while the government merely offers regular assurances like attempts are being made to bring the situation under control. An analytical observation makes us understand that such economic slowdown and pathetic condition is caused due to the government’s apathy.  The Indian government follows the easy way of borrowing rather than managing the own resources which could have helped the country to move ahead with constant progress. The bad economic planning therefore causes inflation. 

 
The highly disturbing element which is a big cause of concern for the country is the unexpected fiscal slippage due to constant rise in inflation. It therefore has direct causal relation with the casual approach and apathy from the government’s side which could take firm step to control inflation with any timely initiative. This situation is highly frustrating for the country and hinders its progress. The successive governments though have hardly taken any concrete step to manage the fiscal indiscipline. Its role in increasing inflation can’t be ruled out. 
 
Although the government often cites various reasons for such worse financial condition that inflation keeps increasing because of the lower-than-expected cash surplus at the very start of the financial year or that National Small Savings Fund (NSSF) witnessed revenue shortfall. A few arguments might prove true but some are baseless because most often the fiscal deficit calculations themselves had proved wrong hence there can’t be a guarantee whether the analysis would be of any worth or not. 
 
The crucial factors of mismanagement and vested political interests besides the preferences of the party welfare of ruling politicians rather than keeping the national interests under consideration are main prerequisites. They cause budget deficits for that no appropriate initiatives are taken to ensure financial health of the nation is prioritized upon the nonsense decisions.   
 
The fact is undeniable that inflation has also caused due to the improper cash management and several such decisions that have been taken without keeping in view the interests of general masses. Arguments are often given by the respective governments but most of them prove wrong when economic analysts judge them. Static interest rates of different types of savings schemes which government offers besides the increased funds gathering through taxes or other sources though should rather proliferate for the stable inflation. 
 
Constant increase in the inflation is only due to inexperienced financial planning and wrong decisions taken to support particular section of the society. The vested interests are more problematic then the economic reasons that often create brouhaha which the countrymen see in the form of an increased inflation not to be controlled so easily.  
 
Often the borrowing programmes of the respective governments create the surprising scenes in the markets. When the market expectation varies too much then fluctuation become a common scenario. Its affect on the benchmark 10-year Government Securities has also been felt. It is one major reason that inflation rate jumped from 7.93 per cent to 8.55 per cent in the recent years. Such situations are definitely pathetic one for that strong and forceful measure had to be applied. 
 
The factors like Prime Lending Rates (PLRs) by the Indian banks concerned and the Reserve Bank of India announcing interest rates from 3.50 per cent to 4 per cent recently was some of the newer steps for effective Monetary Policy to be applied in the coming fiscal years. Such steps are definitely genuine and make it possible for the country to sustain its economy from smaller levels. Unfortunately though some gaps widened due to ineffective economic planning and failure of the government to boost the morale hence the results are not so much appealing yet. Proper economic solution would turn Indian economy more sustainable but it still faces worst situation because of ineffective planning.  
 
The headline inflation has been leaving panicking impact on the country but the government has literally failed to apply an effective measure. Acceleration continues that is uncontrollable due to lack of proper measure. Previous records for the weekly food inflations reaching up to 9.41 per cent and the constant increase in the fuel prices witnessed recently at 14.69 per cent inflation are all typical situations that had showed how the government failed to control worst financial situation. Ironically the government instead declared such situation unmanageable instead of applying timely initiatives. 
 
A close analysis of the whole situation makes you understand each and everything with more clarity. You come to know of government's apathy towards the masses that brings such inflation. Steps could have been taken to make the system more transparent and focusing at the small savings schemes. The step could also be started through attractive financial decisions by the government authorities. Keeping in consideration international pressures, local needs and initiatives that could help it control inflation, the government could stop worse situation.  
 
Slowdown of the main consumer economies of India especially Europe and the USA have resultant impact on country’s escalated inflation. It too is a sort of international cause for that local measure could have been searched to avoid facing such difficult phases especially many external pressures if the preparation could be from the local level to counter numerous such worst situations. 
 
It is true that economic doldrums which India has been facing today is very much due to the immature decisions taken by its successive government which often failed to deal with internal and external pressures to ensure inflation is brought under control. Perhaps it is the main reason that people’s trust and confidence on governments have literally slowed down with such apathies they face. 
 
The present example can be Indian economy failing to grow at its budgeted GDP growth estimate of 9% for current fiscal for that its preparations hardly had any objective mechanism. Even to this day the food inflation continues to be nearby 9% mark that is not a good sign for the economic health of the country. 
 
For such topics of Basic understanding on the subject matter which will keep you motivated to crack  GD & PI at CAT 2011, NMAT, XAT, SNAP  and forthcoming  exams Feb.MAT2012, ATMA, MHCET 2012, CMAT 2012 along with various other state specific MBA entrance tests. This would also be useful for WAT, Extempore speaking, Essays.
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