Inflation woes and controlling price rise among few major concerns for the new Government

Ever since there has been a comprehensive mandate for the new government with absolute majority, there has been positive sentiment among the people. Most of the businessmen are happy and confident on markets improving, slack industries reviving and better business opportunities on the horizon.

Sometimes I think what is the common man thinking or hoping most. Some of the most important factors that our earlier government couldn't address at best were price rise, large scale corruption, bureaucracy, infrastructure problems to name a few. One of the reasons for such an overwhelming mandate is probably hope winning over odds, hope for a better economy, better standard of living.

The common man hopes that Modi Sarkar would implement some major policy changes and decisions to improve their lives. One of the major challenges now faced by new government is the price rise and inflation.
India's wholesale prices grew 7.52 % in November last year, vegetable prices grew 95.25 % in November as compared to 2012 and onion prices shot up to 190%.

Moreover the weak start in Monsoon this year will only add to the difficulty, with even Modi suggesting some tough steps might need to be taken to revive economy. Some analysts expect onion price to rise up to  Rs.100 till October 2014 due to a unpredictable and low rainfall this year.

Some analysts also say our fiscal deficit is high which only add to the challenges. In such a scenario the most common step is to increase interest rates to check inflation. However, as a result companies hurt as borrowings would reduce and this would take a hit on their profitability.

This in turn slows growth and eventually the economy.

We are hoping that Modi government would keep a check on the price inflation, also keeping in mind the economy growth. I am in much anticipation to see what decisions the new government makes. Till then the common man can only wait and hope for the best.