DC Edit | Will poll-eve Budget put a cap on inflation?
Deccan ChronicleOn the eve of the Union Budget day, finance minister Nirmala Sitharaman completed the pre-Budget ritual of tabling the Economic Survey in the Lok Sabha. From a bird’s eye view, the Survey exudes confidence about the course of the Indian economy — the country will continue to be the fastest growing major economy, albeit slowing down its pace a little, inflation remaining at manageable levels, though above the ideal band of inflation that RBI wants it to be, credit growth is robust, and private sector is slowly getting back into the investment mode and many more. Notwithstanding the macroeconomic issues that were discussed in the Survey, three topics would affect people’s spending power directly — inflation, interest rates and rupee value. If inflation is high, the Survey says RBI would keep interest rates high, which would make loan EMIs high, partially affecting the demand of high-ticket products. A higher inflation would also eat into people’s disposable incomes, bringing down their discretionary spending.