India: Sinking or Shining?

Bangalore: Indian economy is jeopardized off late and there is no clue will it show any improvement or not. It’s just been the first few months of this financial year and economy is already in a deep soup. It’s difficult to come up with assumptions for future. There are various factors that have brought about such difficulties that are listed below.

Inflation

This is considered as the biggest failure of the UPA government that is the inability to maintain a balance in the economy. There has been rise in food prices as the wholesale price index has been raised higher then it was five years back. It has worse impact on the poor who spend more than half of their income on the purchase of food items. This hike in food price has immensely affected the poor and has eroded the incomes of the middle class families as well, thus bridging further gap between the haves and the have-nots. This gap may give rise to social tensions. Mostly the price of vegetables, fruits and milk and dairy products have risen producing a cut on the household savings and has reduced the demand for consumer durables and industrial products.