New Delhi: Rising prices caused by shortages, global oil prices and supply chain disruptions have been a matter of concern for a majority of Indians ever since the first lock down was announced in March 2020. Since then ‘IANS-C Voter’ tracker data has consistently shown that a majority of Indians feel that income has gone down or remained the same while expenses have gone up.
Perhaps to provide a boost to this consumer, the Reserve Bank of India (RBI) has refrained from raising interest rates for almost two years despite rising inflation. However, after the retail inflation touched 7 per cent, the RBI raised the repo rates by 40 basis points in May 2022. The RBI raised repo rates by another 50 basis points recently after a bi- monthly meeting of the Monetary Policy Committee. The repo rate is raised by central banks as a tool to fight inflation.
However, a nationwide survey done by this agency reveals that a majority of Indians, a little more than 51 per cent, were of the opinion that the latest moves by the RBI would fail to tame inflation. In fact, the RBI itself has reckoned that the retail rate of inflation in the current fiscal year 2022-23 would hover close to the 7 per cent mark.
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The central bank is obliged to take steps once the rate of inflation crosses the 6 per cent threshold. Inflationary expectations seem to rise with levels of education.
While 45 per cent of the respondents in the low education category feel the RBI will fail to tame inflation, close to 59 per cent in the higher education category feel the same. Otherwise, there seemed to be remarkable consistency in the responses with only 25 per cent of scheduled tribes expressing confidence that inflation could be tamed. A nationwide ‘C Voter’ poll conducted in May 2022 had revealed that more than three out of every four Indians was finding it difficult to manage household expenses because of inflation.