In the recent years the rising inflation has given rise to a number of problems in India including the snatching away of the risk taking ability of able Indians as well as creating a plethora of financial woes.
The 14 % Inflation in India is due to the rise of prices of Vegetables. The rise of prices of vegetables is due to extreme seasonal weather.As per the data from NSO there has been an increasing rise of prices even in the core inflation group which does not include fuel, food and school. Though there have been continuous efforts to bring the inflation levels down it has been in vain. In todays times, it high time the Government takes immediate measures to increase consumption by not only increasing the rate of interest on fix deposits and other Financial Instruments but also by taking active steps by cutting corporate as well as individual taxes.
If we look at the consumption patterns in some Gulf or western countries the consumption pattern has been on an upward curve solely due to measures of Social security and health care services provided by the Government, In India as there is next to no social security other than the friends and family of an Individual the risk taking patterns of an Indian compared to a person in the west or Gulf is not only different as far as spending is concerned but also on lifestyle, travel and consumption of luxury goods.
An Indian therefore creates his own Social Security measures, such as creating a huge savings account and starts hoarding on to his cash reserves. He not only reduces spending but also increases his savings to such an extent that he starts to compromise on his health and hygiene, which increases his chances of falling ill, not attending work and not earning money, which lands him and the Economy in a viscous cycle of consumption vs savings further burdening the economy with not only temporary unavailability of a work man but further adding on to it due the the cost of health care that a subsidised country like India bares.
The burden therefore lies in the hands of the Government to not only provide social security, but also provide a decent income on savings with lesser tax cuts to increase the cash in hand available by an individual, thereby improving consumption patterns and increasing demand further industrialising and strengthening the economy.
The 14 % Inflation in India is due to the rise of prices of Vegetables. The rise of prices of vegetables is due to extreme seasonal weather.As per the data from NSO there has been an increasing rise of prices even in the core inflation group which does not include fuel, food and school. Though there have been continuous efforts to bring the inflation levels down it has been in vain. In todays times, it high time the Government takes immediate measures to increase consumption by not only increasing the rate of interest on fix deposits and other Financial Instruments but also by taking active steps by cutting corporate as well as individual taxes.
If we look at the consumption patterns in some Gulf or western countries the consumption pattern has been on an upward curve solely due to measures of Social security and health care services provided by the Government, In India as there is next to no social security other than the friends and family of an Individual the risk taking patterns of an Indian compared to a person in the west or Gulf is not only different as far as spending is concerned but also on lifestyle, travel and consumption of luxury goods.
An Indian therefore creates his own Social Security measures, such as creating a huge savings account and starts hoarding on to his cash reserves. He not only reduces spending but also increases his savings to such an extent that he starts to compromise on his health and hygiene, which increases his chances of falling ill, not attending work and not earning money, which lands him and the Economy in a viscous cycle of consumption vs savings further burdening the economy with not only temporary unavailability of a work man but further adding on to it due the the cost of health care that a subsidised country like India bares.
The burden therefore lies in the hands of the Government to not only provide social security, but also provide a decent income on savings with lesser tax cuts to increase the cash in hand available by an individual, thereby improving consumption patterns and increasing demand further industrialising and strengthening the economy.
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ReplyDeleteExcellent mam....pls keep sharing your valuable insights...
DeleteKind regards,
Ebrahim Rupawala