Why inflation is major concern for families:The indian economy is highly vulnerable

Inflation generally means price rise or demand and supply increase, if other words says sustained upward trend in the general price level of various goods and services. Inflation generally depends upon not only the above mention macroeconomic factor the same time due to some external issue as well cumulatively inflation actually means sustain increase in the price level. at the same time reduction in the purchasing power of the money.look at financial year 2021-22 world was witnessing a very high degree of inflation and today's time gas(CNG) and many goods under due to cost push inflation. Cost push inflation means shopper store goods and when demands high in market then supply these things commonly known as cost push inflation. 

Let's understand stagflation, commonly known as high inflation and high unemployment, for a growing economy like India or any other emerging economy it would be quite beneficial. If there is a moderate high inflation and very low unemployment. Low unemployment depict moderate GDP growth as well and cumulatively and aggregate demand. Why indian economy highly vulnerable to US federal rate. We know that globally US dollars in goods and services supply. Major cause all country are dependent US dollar. However BRICS country continue try to decrease dependency for dollarization. But US financial system is very strong, but slowly-slowly will loose, why BRICS country continue talking alternatives system, oil, natural gas sell and buy own currency.            Impact of raising federal rate on indian economy - due to raising federal rate American bond market become more attractive which lead to withdrawal of money from indian market. Since foreign investors were taking dollars from India and investing in US mkt. It leads to expansiveness of US dollar as a result RBI was force to sell some dollar to help domestic currency of India. high interest rate in US will make indian market less attractive for foreign investors. Therefore foreign investor will do the capital outflow from India which will further put pressure on indian rupee. As a result dollar gain streingth compare with Indian rupee. In 2020 corona crises came then demand shock, and 2021 petrol cruid oil supply side shock ( commodity inflation) then 2023 start Russia ukraine wand and prasent time ongoing Israel - Iran- US war in supply side shoch and increase commodity price. major cause world wide or external problem lot but our India in internal cause lot, student struggle for job, labour struggle for wage justice, continue running election and political party spend lots of money that I win the election. If simple says In Indias job crises struggle,all student try to attain job but not enough job in market and government sectors. Indian workforce is having a low paid unproductive job where adequate amount of compensation not there and as the result most of the Indian family do not have sufficient consumption. Number of people who are working are labour force participation rate may have increased but formalisation of jobs have not been increased. Therefore we do not have job crises, we have a crises of formalisation.                   Written by - Aman Vikal