In all likelihood, inflationary impulses would moderate, as they have with regards to the CPI over the last few months
Those with adequate savings, including pensioners and senior citizens, would want the rates to be higher rather than lower. However, economics is concerned with real variables
COVID – 19 vaccines certainly do meet the criteria for an exemption. However, the same cannot be granted for various reasons.
To understand why savings are up, let us begin with the precautionary motive for savings. When there is visible income stress & heightened uncertainty regarding the future, people cut back on their spending and increase their savings.
Lockdowns are not the endgame of the pandemic, but vaccines are, and this is why state governments need to make efforts to improve their daily vaccination numbers post-May 1
Vaccination is our only potent policy weapon which can bring an end to the present pandemic and its resultant economic crisis
Many people have often ignored that India witnessed a transition from a moderate inflation economy to a low inflation economy (a 4% inflation rate for an EM can be considered as frictional)
We must welcome the decision taken by the Supreme Court as the issue is fairly technical in nature and thus best left to specialist institutions such as the Reserve Bank of India
While there are certainly better days ahead, there is also a need to recognise that we have paid a huge cost due to the pandemic – a cost which was unavoidable – and one that ensured we save significant lives
Our decision to hold cash or consume is influenced by a series of factors of which interest rates (& by extension inflation) are important factors