The major reason behind inflation is just not demand-led is supply-side inflation. The SBI chairman has given clarity over the global recession.
Explaining the topic Dinesh Khara said that all economies across the globe are going through a rough patch. However, the government is focused on dealing with these factors.
State Bank of India Chairman Dinesh Khara said, “The impact of a global recession, which is increasingly being feared by the International Monetary Fund and the World Bank, is unlikely to be as pronounced in India as compared to other countries.”
“With a projected growth rate of 6.8 percent and inflation “much under control India is doing reasonably well”, Dinesh Khara added.
“The impact of a global recession, which is increasingly being feared by the International Monetary Fund and the World Bank, is unlikely to be as pronounced in India as compared to other countries”, Dinesh Khara added.
“Majorly, it (India) is an inward-looking economy in terms of demand because a significant component of the GDP is essentially addressed to the domestic economy”, he said.
He further added, “So, from that point of view, I think it (global recession) will have an impact but it won’t be as pronounced as perhaps (it will be on) other economies which are fully coupled with the globe.”
“If we really look at the supply-side aspect of inflation, we’ve got a situation where capacity utilization is just about 71 per cent. To that extent, there’s elbow room available for improving the capacity. So essentially, supply chain disruption, which has happened on account of the global headwinds, and… Its impact on crude prices is one of the contributing (factors)…,” he added