The Reserve Bank of India decided to constitute a panel in order to decide the upcoming rate of interest for deciding the economic policy of the country so that the economic position can be controlled over the period of time. The monetary policy committee has finally decided to maintain the level of repo rate to be at 6.5%. Most of the investors were expecting this particular rate to be increased over the period of time in order to reduce the liquidity from the market which is resulting in inflation and overconsumption among the consumers.
The decision of the government to maintain this level has been challenged but most of the people doubt whether this particular decision will be helpful to control the inflation over the period of time. The inflation indices of the last quarter were pretty controlled. On the basis of this particular report the decision to maintain the level has been taken so that without making any changes the perimeters of the economy fall into place. It is important to understand that the next meeting will be very important to take a decision with respect to the way in which the economy will progress.
If the inflation continues to grow then automatically it will be very difficult for most of the people to manage the expenses and Reserve Bank of India would be triggered to increase the repo rate. The decision will be taken on the basis of the way in which the economy reacts over the period of time. Not only this but also some of the members of the meeting had also suggested to reduce this interest rate because it was for the benefit of all the people but most of the members did not agree because increasing the level of consumption expenditure would be leading to a devastating effect on the level of inflation in the country. The expectation of the people with respect to the future inflation has been proved with the help of the consumer price index which has currently revealed a 10% shift in the prices as compared to that of the previous year and this has been able to increase the monthly expenditure of most of the people by 15%. The circulation of money is very necessary in the economy but if it leads to inflation then it has to be controlled at every cost. This is the most important aspect that has to be taken into account every time when a decision like this is taken.
The meeting concluded on a positive note that the climatic changes which are taking place in the present world will definitely have an impact on the economy. This is the most essential factor that has to be taken into consideration because it is only with the help of these measures that a difference can be recorded. This is the way in which the country must function in the long run. It will improve all the prospects of the technology and any kind of development bill definitely increase the level of gross domestic product