Consider these 9 things before investing in mutual funds!
What is the right way to invest in mutual funds? How do mutual funds work? What kind of risk is involved? Which fund is right for whom? What things should be kept in mind before investing? Watch this video to know-
Growth is god. Especially for a country that is struggling to emerge from the clutches of a pandemic-induced paralysis, tens of millions of lost their jobs, pay cuts, and decimated businesses, nothing else deserves our worship. Shaktikanta Das, the governor of the Reserve Bank of India, was right in selecting his God after the two-day meeting of the monetary policy committee earlier this week.
The central bank boss deserves praise for plain speaking. He said growth was of “paramount importance” and this is precisely where he triggered apprehension. In a growth-obsessed climate, it is easy to put inflation on the backburner. To facilitate growth, the central bank wants to keep up the money supply in the economy where a section of economists is already flagging inflationary pressures.
Most organisations, from the International Monetary Fund to the World Bank, from S&P to Moody’s, have predicted double-digit growth rates for India for FY22 – a rate of growth that will be the highest in the world. The pursuit of growth lends a heady feeling and if it propels you to the top of the league of nations, it’s even more so.
But if the quest for growth takes the country towards an era of high inflation, it would imperil the interests of the common man, whose interests RBI seeks to protect in its single-minded pursuit for growth. Inflation has often been called the worst form of tax on the poor and, ironically, it is the poor that the economic administrators are trying to lift out of the COVID morass.
The recovery of the economy is still very tentative. The GDP growth rates were going downhill over the past few years until the economy took a plunge in 2020-21 recording two successive quarters of contraction. The government is working towards a V-shaped recovery and knows it is essential to silence the critics.
It is true that growth will create demand for different goods and services in the market that will result in more hiring and will put money into the hands of the poor. But it is also true that wages are sticky, it takes time to rise while prices rise at a much faster pace.
RBI goes by a ceiling of 6% of Consumer Price Index-based inflation. The CPI-based inflation in January 2021 was 4.06% that rose to 5.03% in February. There is constant upward pressure on inflation due to the runaway prices of petrol and diesel that is on hold for a few weeks coinciding with the assembly election in five states that are underway.
Growth is certainly one of the concerns of the central bank of any country, and so is inflation. The RBI cannot, and should not, sacrifice inflation for growth. For, inflation aggravates poverty.