India's rate of inflation crossed the eight per cent mark during the middle of this calender year as international crude oil prices rose to unheard levels.
The Government tried everything to rein in the runaway inflation rate, which had remained at quite normal rates of around three per cent during the regime of NDA, but to no avail. Finally, the UPA Government cut import duties and other taxes on fuels to cushion customers from record oil prices and curb the inflation rate.
Though the impact of the duty cuts was felt, but for a while, it seemed as if that alone would not be enough and Government may have to tinker with interest rates. There was panic among cunsumers as rising fuel prices had a spiralling effect on the prices of food articles and other consumer durables. Investors too were worried as rising inflation had beaten the interest rate at which most of their saving were done, thus bringing in negative returns in real terms.
Thankfully, the bugbear of inflation has come under control and is slowly on its way down.
- Koshy Samuel