Published on: August 6, 2021



What is Inflation – Inflation is the decline of purchasing power of a given currency over time.

Post pandemic inflation causes in India :

  • High commodity prices and high asset price inflation caused by ultra-loose monetary policy followed across the globe
  • Low market capitalisation compared to a developed capital market such as that of the U.S
  • Less access to financial assets by middle and lower-middle-class
  • Essential goods have increased in cost due to scarce supply because of supply chain bottlenecks especially petrol. It should be noted that increase in fuel prices will also lead to a rise in wages demanded as the monthly expense of the general public increases. This leads to the dangerous cycle of inflation and depleting growth.
  • Rising non-performing assets

Way forward :

  • Policy those focus on removing policy bottlenecks
  • Strengthening the framework to deal with bankruptcies
  • Improve public infrastructure investment
  • Support the marginalized