The greatest threat the UPA government faces today is inflation. Inflation of food products was hovering around 20% in December 2009, which is stuck around 16.5% in May 2010. Everyone seems to ask the same question- will this ever stop?
It is to be noted here that the global recession has changed the world. The traditional players of the world economy have lost it. Development rate in Japan has depreciated in the past two decades, and many of their industries are incurring heavy losses. Europe is suffering with loan and the development that has started in USA is on weak grounds! Under these circumstances, for the first time in history, it is Asia (read China and India) that has saved world from a global crunch!
The future of inflation heavily depends on the monsoon this year. If rains are normal this year, and the consumer product prices remain the same globally, then we can expect the inflation rate to come down to 6.5% by March next year! So, let’s hope it rains this year!