Economics லேபிளுடன் இடுகைகளைக் காண்பிக்கிறது. அனைத்து இடுகைகளையும் காண்பி
Economics லேபிளுடன் இடுகைகளைக் காண்பிக்கிறது. அனைத்து இடுகைகளையும் காண்பி

16 பிப்., 2025 in

Inflation Tax Explained: How It Impacts Your Money & Economy | Porul.in

Inflation Tax in India

What is Inflation Tax?

Inflation tax is an implicit tax that happens when the government prints more money, leading to inflation. Inflation tax reduces the purchasing power of money held by the public, effectively transferring wealth from individuals and businesses to the government.

What is Inflation?

Inflation is the rate at which prices for goods and services rise, resulting in a decline of purchasing power over time. When inflation occurs:

  • Each unit of currency buys fewer goods.
  • Consumer prices generally increase.
  • Savings lose value if interest rates don't keep up.

Central banks aim to maintain moderate inflation (typically 2-3% annually) to encourage economic growth.

Mechanism of Inflation Tax

  • When governments face fiscal deficits and struggle to raise revenue through taxation or borrowing, they may opt for printing more money.
  • This increases the money supply in the economy, leading to inflation.
  • As prices rise, the real value of money held by the public declines. This means people can buy less than before with the same amount of money.

Money Supply & Inflation Rate in India (2015-2024)

Understanding the Impact of Inflation Tax

Source: Reserve Bank of India (RBI), World Bank Data

Effects of Inflation Tax

  • Redistribution of Wealth: Individuals holding cash or fixed-income assets (like bank savings) suffer, while borrowers benefit as debt loses real value.
  • Decline in Real Wages: If wages do not keep up with inflation, workers experience a reduction in real income.
  • Erosion of Trust: Persistent inflation can lead to declining confidence in the currency and economic instability.

12 ஜூலை, 2024 in ,

National Waterways - TNPSC

National waterways of India

 
To promote Inland Water Transport (IWT) in the country, 111 waterways (including 5 existing and 106 new) have been declared as National Waterways (NWs) under the National Waterways Act, 2016 which came into effect from 12th April, 2016.

26 செப்., 2022 in ,

Minimum Support Price (MSP) - UPSC

 At the beginning of every sowing season, the Government of India declares Minimum Support Price for 22 crops at which the government purchases from farmers/producers. It gives a guaranteed price and assured market to the farmers by protecting them from Market fluctuations and imperfections.

Minimum Support Price :

   During the mid-1960 when the Green revolution was helping the government was fighting against the food deficit that India faced, the government realised that unless the crops were guaranteed a minimum support price the farmers won't be motivated to plant high-yielding varieties of Paddy and Wheat crops. MSP was fixed beginning with Wheat.
  
   The government of India sets MSP twice a year. It is recommended by the Commission of Agricultural Costs & Prices which is under the Ministry of Agriculture and Farmers Welfare. The recommendations are of advisory nature and it is not binding on the government. 

Calculation of MSP:

   The commission takes various factors while calculating the MSP like
  • Cost of Production
  • Trends in Market Prices
  • Changes in Input prices
  • Input-output Price Parity
  • Effect on the cost of living
  • International price situation
  • Demand & Supply
  • Effect on issue prices & Implications of subsidy



15 ஏப்., 2022 in , ,

What is Account Aggregator Network? - Porul

 Recently, India unveiled the Account Aggregator (AA) network, a financial data-sharing system that could revolutionize investing and credit, given the potential pool of customers for lenders and fintech companies.

Account Aggregator 

   An Account Aggregator (AA) is a type of RBI regulated entity (with an NBFC-AA license) that helps an individual securely and digitally access and share information from one financial institution they have an account with to any other regulated financial institution in the AA network. Data cannot be shared without the consent of the individual. It also gives an Individual to choose an Account Aggregator among many.

Account Aggregator

What's there for an average person?

   Our system if filled with hassles today. To ease this a bit, the Account Aggregator network will replace the tedious Paper Process with a easy to use safe digital data access & sharing process.
Account Aggregator



Data Security

   Gradually the AA framework will make all financial data available for sharing, including tax data, pensions data, securities data (mutual funds and brokerage), and insurance data will be available to consumers. But Account Aggregators cannot see the data. All they can do is take the data from one financial Institution to another based on Individual's direction and consent. The data AAs share is encrypted by the sender and can be decrypted only by the recipient.

Way Forward

   The two key services that will see a rise is Improved access to loans and access to money management. If a customer wants to get a small business or personal loan today, there are many documents that need to be shared with the lender. Through Account Aggregator, a company can access tamper-proof secure data quickly and cheaply, and fast track the loan evaluation process so that a customer can get a loan. Also, a customer may be able to access a loan without physical collateral, by sharing trusted information on a future invoice or cash flow directly from a government system like GST or GeM.

31 மார்., 2022 in ,

Open Network for Digital Commerce (ONDC) - Porul

Open Network for digital commerce (ONDC) is an open network that enables buyers and sellers to connect digitally across various platforms. It emulates UPI. Here it promotes interoperability across e-commerce applications. To put in simple words if there is a seller in Ecommerce platform A, while a buyer in Ecommerce Platform B. Now what if the buyer in Platform B could see the products of the seller in Platform A. ONDC tries to create this interoperability by acting as a bridge. Hence, transactions can happen through ONDC regardless of the platform.

Gains 

Here comes the question. What are the gains ?. As ONDC works cross platform, it creates new access to more buyers, more opportunities. Basically ONDC can democratize the digital commerce by providing a level playing filed for everyone.

What is in for government :

Currently Ecommerce market is dominated by a few large players. This serves as an Impediment for aspiring businesses which struggle before the global entities. Hence, by connecting the buyers and sellers the government plans to create a level playing field. 

Source: Thehindu