Keeping inflation high while sustaining the existing atmosphere of economic development and capital investment was the primary aim of this year’s Union Budget, according to the Union finance ministry. It has had a disastrous impact on the Indian economy, especially on individuals who work in the informal sector and the general public.
The small and medium-sized enterprise (SME) sector has yet to awaken from its sleep, which accounts for one-third of all employment creation. It is believed that planned capital expenditures would increase demand in other sectors in the next days and weeks, even though interest rate reductions had minimal influence on the economy thus far in 2018.
Since it is projected that crude oil prices will continue to rise, the Reserve Bank of India (RBI) has done nothing to alter its monetary policy. Because the Indian stock market is being impacted by the Federal Reserve’s tightening of money supply, any change in the Reserve Bank of India’s monetary policy might have had a far greater effect and may have jeopardised the company’s scheduled initial public offering.
Due to a shift in government attitudes toward disinvestment and privatisation, the impending LIC initial public offering (IPO) is significant for the Central Government, which has already cut its disinvestment targets for fiscal years 22 and 23.
What factors, if any, have contributed to the Modi Government’s shift in tone and duration? Is it primarily due to its inability to pass Farm Reform Laws and the opposition the BJP encountered in the assembly election in Uttar Pradesh, India’s largest and most populous state, which sets the tone for politics in the rest of the country? The assembly elections taking place this year in five states, including Uttar Pradesh, will have a huge influence on the future of the Modi administration.