Dearness downward in Modi Govt

The latest inflation data has proved the anti-government narrative that the opposition parties have been creating for the last few years about the level of inflation in the country. This means that the country's economy is on the right track and inflation is not increasing even though the demand for essential commodities in the market remains intact. The rise in retail inflation at 2.82 per cent in May means that the poor have not moved food items out of their reach and are able to make a comfortable living. The prices of food items are falling in the market, which shows that there is a balance in demand and supply. Decline in the level of inflation in a market driven economy has multiplier implications. This also affects the bank's interest rates and also affects the prices of precious metal gold. In India, the Reserve Bank of India has reduced the interest rates of the bank in the past, which was based on the expectation that inflation rates would come down. The Reserve Bank of India (RBI) has already reduced interest rates by nearly 1 per cent in the last one year, which has a cascading effect, especially on loans taken from banks. Inflation stood at 2.82 per cent in May. This rate is the lowest in the last six years. This rate has been less than the expectations of economic experts as experts were expecting that the rate of inflation would be around three percent.

Generally, the rate of inflation in developed countries is between two to three percent, but in a developing economy like India, this rate shows that the parameters of the economy are running at their highest level in the current world economic scenario. The growth rate in India is estimated to be higher than 6 percent, which is higher than the developed and developing countries of the entire world. But it also shows that the way the opposition political parties have been campaigning against the government for the last few years against the rising level of inflation was far from reality. The 2.82 per cent inflation in May, the lowest in six years, meant that the campaign by political parties was more politically motivated than by facts. Rising inflation was made an issue, especially on the occasion of elections. While everyone knows that due to the high inflow of cash money in the market on the occasion of elections, its impact cannot remain on the prices of food items.

On the occasion of the Lok Sabha elections held in 2024, this inflation rate was around four percent. But after this, the government took strict steps in this direction, which yielded positive results. The inflation rate in February 2019 was close to the current 2.82%. After this, it kept increasing and in the meantime it went above 5 percent, but the government was always cautious on this front and did not allow a decrease in the supply of goods in the market. However, on many occasions, the government also faced opportunities to reduce the arrival of goods. Despite this, the government has made efforts to fill the gap by activating the protective framework of supply. The wholesale consumer price index was close to 3.2% in April. Due to the abundance of goods in the market, the prices of goods in the retail market could not increase. Now economists are speculating that inflation will be even lower in the coming time. Especially till the month of October, it will continue to fall. Bihar assembly elections are also due this month. Therefore, in a poor state like Bihar, the ruling parties BJP and Janata Dal (United) can get relief on this front and the opposition will not be able to surround the state government on the inflation front.

Of course, India imports edible oils in large quantities, but in this item, there has been an atmosphere of softening of prices in the international markets and its direct impact has also been on the domestic market. The prices of edible oils have been softening for the past few years. The same situation remains with the prices of pulses and other vegetables. Now the rainy season is about to start and it has to be seen what kind of monsoon it will be because the time of sowing of Kharif crop is also near. If the monsoon is good, it will have a positive impact on the market and inflation will remain subdued. The current year 2025 will be said to be auspicious for the Modi government because in this year it has not only got electoral success but it has also had an upper hand on the inflation front.