India is experiencing a major economic backlash in recent time i.e inflation rate which is constant above 7% mark, which is a great area of concern for the ruling UPA govenrnment, hard to manage household budget for the lower middle class and middle class section of the society. The prices of necessary commodities has spiked upward as compared to last year, the prices of pulses, edible oil, steel just got doubled and costing harshly to the lower and middle class household.
Despite the fiscal measures taken by the ruling government and montery policy measures by the RBI the inflation is not coming to a level which we can say normal.
Why ? well the answer is not that easy , if it would have then probably the government had already taken it into consideration and the inflation could have been down to the acceptable level. Actually in any open economy like ours, govenrment use to have very limited or no control on economy in short run. Fiscal stimulators normally work in long run, so any such stimulator is not going to work probably and this time the inflation is seems to be due to insufficient suppy side aggregate and huge demands. Although the government is trying to manage the insflation growth but i think it will all go waste and ultimately we ( Government and people) would hope for better monsoon resulting better crops which will bring the demand and supply equilibrium.
But considering the election year the UPA governement has to prepare for bitter taste and unpleasant result.... " Kyonki Garibon ko Dal bhi naseeb nahin ho pa rahi hai.. "