Inflation is resurgence in India, says Axis Bank chief

Inflation is resurgence in India and the world. Retail inflation soared to an eight year high of 7.79% and the whole price index rose to 15.08% in April, driven by rising food and fuel prices. India's rural inflation was 8.38%, about 0.68% higher year on year. The common man's pockets are being put under strain because of the rise in India's inflation rate. India is poised to grow in the long run despite inflationary pressures, according to India Inc. at the World Economic Forum in Davos.

In a special conversation with Business Today on rising food inflation in India, Amitabh Chaudhary, Chief Executive Officer, Axis Bank, said that the other job on inflation has to be done by The Reserve Bank of India, which they are already doing, they have to bring demand and liquidity down. The pre covid levels are going to be the first step in the next couple of months, which is a 75-100 basis point increase. The data will speak for itself and then RBI will react to that data. The problem is because of the external factors and it is not easy to handle. The impact of external factors is not in government's hands.

Sanjiv Bajaj, resident of the Confederation of Indian Industries CII and CMD, Bajaj Finserv, said that the big concern is going to be food inflation, especially if the monsoon doesn't result in a good note. The worst of the Pandemic is behind us. India needs to work on domestic consumption. If we don't have a good monsoon, then government will have to step in order to subsidise food prices. Bajaj said something.

Amitabh Kant, CEO of NITI Aayog, said India is the only country in the world where direct benefit transfers can be made of money directly into accounts of needful. We have transferred food subsidies to 840 million people in the country through direct benefit transfer. The reforms are helpful for people below the poverty line. Kant said it was a path breaking initiative that was taken by the government.

In its first move in two years and its first hike in nearly four years, the repo rate was raised by 40 basis points to 4.40 percent after an off-cycle meeting earlier this month.

In April the RBI raised its inflation forecast to 5.7 percent from an earlier estimate of 4.5 percent and reduced its GDP estimate to 7.2 percent from 7.8 percent for 2022 -- 23 and cited the impact of escalating geopolitical tensions triggered by the Russia-Ukraine war.