India Battles Inflation & Growth Slowdown, As Pandemic Continues
India is battling a rise in retail inflation and towering petrol prices across states. Earlier this month, Scroll.in reported that retail inflation touched 6.3% in May as compared to 4.23% in April, which is measured by Consumer Price Index.
The changes in the CPI or Consumer Price Index are monitored to track the price fluctuations related to the cost of living. Large increases in the CPI over a short period of time means the economy is undergoing inflation.
Further, the petrol prices have been hiked in India for the 36th time since May 2021. This time around, the per litre cost of petrol has gone over INR 100 in at least 16 states and union territories including Delhi and Kolkata. This change in petrol rates came after the increase of 35 paise per litre over the old price. Also, the diesel prices in the country have been hiked by 17 paise per litre.
The World Bank has also reduced GDP growth estimates for India from 10.1% to 8.3% in FY 2021–22. This conservative estimate was attributed to the carnage of the second covid wave in the country, which has led to a drastic economic slowdown.
In comparison, the United States is estimated to grow at 6.8% while China’s growth is projected to undergo an 8.5% growth, according to the World Bank. Overall, the world economy is projected to have a growth rate of 5.6% in FY 2021–22.
The World Bank’s latest Global Economic Prospects Reports said, “India’s recovery is being hampered by the largest outbreak of any country since the beginning of the pandemic. With surging COVID-19 cases, foot traffic around work and retail spaces has again slowed to more than one-third below pre-pandemic levels since March, in part due to greater restrictions on mobility.”
