Director General of MCCIA, Prashant Girbane
Photo: Mirror Now Office
By Swarali Joshirao
Pune: Inflation has become a major concern in the global economy as it hit around 8.8%, double the previous average of 4.7%. Two major reasons considered to be the root cause of inflation are the jolt to the global economy caused by the pandemic and the Russian-Ukrainian war. Even looking at the numbers for the US economy, inflation has increased more than twice, from around 3.3% to 8.2%.
Inflation is the result of the disparity between income and expenditure. Governments had to print or borrow as health sector spending had soared during the pandemic. Second, the Russian-Ukrainian war added to the intensity because the price of fuel hit an all-time high. Very few countries produce fuel while most of them consume it.
“If we look at India
, it is in a much better position compared to other nations. The reason being that our comfortable band is 4-6% while our current inflation rate is 7.4%. has increased so it is not so good but it is comparatively better than other economies,” said Prashant Girbane, Managing Director of Maratha Chambers of Commerce and Agriculture (MCCIA), while talking about MSMEs He further informed that they suffered huge losses.
Girbane said: “Of an odd 6.3 crore MSMEs, many were affected during covid. But in a survey of 200 businesses each month, data showed in April 2020 production levels had dropped to 27 %, which gradually increased to 95-97% by April 2022.”
Explicitly talking about the policies of the Union government during covid and to fight inflation, Girbane said: “I think the credit guarantee is a wonderful initiative. As the government has not had to print more money or to borrow it.” On the other hand, on divestments, he said it is very important for India. Not just LIC, other public organizations are also expected to opt for divestments. It is better to use the country’s reserves than to borrow money.
About the Indian currency and FM Nirmala Sitharaman’s statement, he explained: “In a way it’s correct. The dollar is soaring due to inflation. The United States has increased the interest rate of 0.25 to 4% dollar in the global economy, which leads to an increase in the exchange rate, when we compare the dollar and the rupee, it tends to decrease.
According to current statistics, countries like US and UK are showing that they can lend into recession while India’s growth rate might decline, but the trends are not heading towards recession. “It’s terrible to compare the Indian economy with Pakistan or Sri Lanka. We have different types of strengths, reserves and levels of consumption. We’re not going in that direction at all.”