The Reserve Bank of India has come up with the latest report according to which the high level of inflation is once again responsible for reducing the capacity of the average Indian to spend money. It is important to understand that corporate Profitability has been increasing over the period of time but this increase is just not equal to increase in the inflation and that is why it is becoming difficult for the people to mitigate this gap over the period of time because this inflation is currently beyond the out of Scope and as if result the consumers have reduced the expenses to a great extent.
It is important to understand that this particular study is very important in order to understand the Trends of the economy in the times to come because this will help to channelise the Future economic policy and the capacity of the citizens. The personal consumption expenditure has increased while the focus on investment has increased to a great extent. The private capacity of the people has definitely boosted over the period of time and it has been with the help of all of these efforts that a unique Outlook has been provided.
The decision of the government to fix a high repo rate has definitely been uploaded for the time being because if these interest rate will be high then automatically the cost of taking loans be also increase and this be definitely De motivate the consumers to take loans and If the cash flow with the consumers will decrease then automatically it will not be possible for them to purchase so many things in one go and this will help them to reduce the postal consumption expenditure. The reduction of the personal consumption expenditure is one of the best methods to control inflation and this particular method has been approved by the Reserve Bank of India itself. The utility of this method has been acknowledged in almost every part of the world. The current situation in which India is for the time being is definitely one of the best situations because the economic policies of India has always protected it in the long run and this has been the biggest booster of success over the period of time. The government is trying its level best to protect the Indian economy. If these policies are not put into force then it will become difficult for the country to protect itself from the effects of recession that the western countries are facing for the time being.
The policies of the government has been made flexible with respect to the changing situations so that it is feasible for the people to understand the way in which they must plan not only expenses but also there investment over the period of time. Such kind of changes definitely help to bring a better impact over the period of time and this will be the best way in which all of these factors would be taken into account.