If Commodity Prices Keep Rising, India's Inflation May Rise By 1%
For almost a year, people have been outraged by the constant rise in the price of commodities such as crude oil, electricity, natural gas, etc. The rise of these commodities affects our economy in a severe way. Now Nomura, a Japanese financial holding company, has announced that if these prices are not controlled, India could be facing a 1% rise in inflation. That's upsetting news for the Indian economy which is already in turmoil.
Inflation has a direct effect on supply and demand and eventually affects the GDP of a country and if that country is India, it's a deal-breaker because India's GDP has already been down in the gutter for the past few years now. The GDP growth has gone down substantially and this was happening way before the COVID-19 pandemic. So, one cannot solely blame the pandemic for the crippled economy of India.
Last week itself, we covered the news of petrol going way past the Rs.100/liter mark in big cities such as Delhi and Mumbai. Many have been calling out the Centre for such high prices even though the international price of crude oil hasn't budged even a little in the past three months. If the Centre doesn't control this, it would have a grave effect and the brunt of this would obviously be borne by the common man.