The Great Depression that descended on the world from the global banking crisis...

- Atapata of Arthakarana-Dhawal Mehta

- As inflation increases, people's savings decrease, which affects economic growth

The rate of inflation in India is unlikely to go below 6 percent. The Reserve Bank is mandated by the government to keep the inflation rate within four percent plus two or less or two i.e. 2 to 6 percent. In America, the target of the Federal Reserve Bank (Central Bank) is that the inflation rate should not exceed 2 percent, while the inflation rate in India is not fixed at any figure but it should be in the range of 2 to 6 percent. India's retail market inflation rate was 6.52 percent in January 2023 as against 6.44 percent in February. It has come down slightly but not below 6 percent. A high rate of inflation is a kind of robber or thief. It reduces people's purchasing power without asking you. Today, the price of coconut oil is around 200 rupees per liter. It shows how much the high rate of inflation reduces the purchasing power of people's income. Crores of people who are slightly above the poverty line are brought below the poverty line due to high inflation, which we call core inflation, in which the inflation rate of food and fuel is subtracted from the total inflation, and in India that too for the last four months. 6 percent has been continuously above. In short the high price rise in India is not only due to the high prices of food and fuel but the rise in prices of many other commodities is also responsible for it. To counter the high rate of inflation, the Reserve Bank keeps increasing the Bankrate (interest rate) so that those who take a loan sell their house. If certain items (TV, laptop, computer, refrigerator, air-conditioner, car etc.) are purchased on installments, the installments increase significantly. The borrower gets upset seeing the increase in installments.

As people's savings decrease, investment becomes less and hence the rate of economic growth decreases. As the government creates new money to finance its massive spending, called the fiscal deficit (a major component of which is the revenue deficit), the rate of inflation reaches frontier mail. If inflation turns into higher inflation, it becomes difficult for the incumbent government to survive. In Pakistan, in Sri Lanka, this is especially the case. If the government incurs huge debt to meet the fiscal deficit, then the government has to allocate such a large amount in the budget as interest on the debt that the government has very little financial resources for economic development. The government debt in India is 84 to 86 percent of the country's GDP, so it will be understood that the government has to allocate a huge amount of money in its budget for debt interest. Also, India's military budget keeps increasing and considering the international situation, this expenditure has to be incurred. The pension of the retired employees of the government is also a huge burden so the government does not have enough money for the development of the country. Today the whole world is terrified of inflation and rising bank interest rates. Two major financial institutions of America have collapsed. In America, an event that takes the form of a very large event or tragedy is called the snowballing effect. A banking crisis has arisen in the whole of Europe in the near future. If a big bank collapses, it infects other financial systems as fast as Kovid. Hence there is a fear that the financial system of the world which is interconnected like a spider's web will collapse. All the governments of the world have the same fear that the failure of American banks and the banking crisis of Europe will push the world into recession or Great Depression, right?