New Delhi: Various changes in economic system of the country has started to affect the economy. Some analysts feel that hasty implementation of GST have negatively impacted the economy. While demonetization had break the cycle of the circulation of notes, GST have slowed the process of business. Not only this, it has made the system more costly. Rising inflation is not a good news for te lower-middle class and the poor. They have to spend more they were spending before.
India’s annual retail inflation is accelerating and in December, it has reached to a 17-month high of 5.21%. It was revealed in government data showed on Friday. This is mainly due to the rising prices of food and fuel products.Analyst believe that government will have to work on this issue.
There are various factors such as increased prices for some foods and the impact of higher pay for government employees.In December, the Reserve Bank of India held its policy rate and reiterated a neutral stance but said that “all possibilities are on the table” depending on how price pressures and growth pan out.
RBI raised its inflation projection through March. Economists believe that sustained inflation is not a good sign for the economy.