Finance Minister Piyush Goyal will present the Interim Budget 2019 in just a few hours from now. The Budget bears significance not only for the people of the country but also for the Narendra Modi government, which will seek re-election in the Lok Sabha polls to be held in a few months. A lot of it, however, depends upon the country's economic condition. So let's try to understand how much the country has gained or lost in the past year in terms of economic growth and issues matter to the common man.
Union Minister Arun Jaitley had presented the last year's Budget on the same date on February 1. A day before the Budget on January 31, 2018, the Sensex had reached the level of 35,970, while Nifty fifty was zooming ahead at 11,020 points. Fast forward one year, and the Sensex is trading at 35,750, which is 50 points down than a year before the mark, while Nifty is trading 50 points above than a year-ago level.
The rupee faced a lot of turbulence this year as investors dumped the local currency in wake of global headwinds coupled with widening current account deficit led by higher crude oil prices. Factors that led to the rupee fall included a strong demand of the US dollar, rising crude oil import bill, Fed rate hike, and Turkey currency crises. The rupee was at the level of 63.66 on January 31, 2018, and a year later, it has declined to a level of 71.06.
Gold prices have soared to fresh record high in India. While gold was Rs 31,230 per 10 gramme on January 31, 2018, it has taken about Rs 3,000 jump to Rs 34,200 per 10 gramme on the back of higher domestic demand. The silver prices, on the other hand, have declined from Rs 42,200 per kg on January 31, 2018, to Rs 41,400 per kg a year later. The demand for the yellow metal last year stood at 760.4 tonnes, lower by one per cent than the 771.2 tonnes consumed in 2017. For this year, the agency predicts the full-year demand to be little higher in the range of 750-850 tonnes.
Petrol was priced at Rs 72.92 per litre on January 31, 2018. Despite a huge increase in prices in the last months of 2018, petrol has now declined to Rs 71.09 per litre in Delhi. Diesel is also down by around a rupee at Rs 64 per litre in Delhi. Fuel prices in India change every fortnight tracking changes in crude oil prices in the international market.
The Reserve Bank of India (RBI) has increased repo rate -- the rate at which the RBI lends money to other banks -- by 0.5 points to 6.5. The tight monetary policy stance adopted by the RBI also led to a virtual spat between the government and the central bank, which ultimately led to the resignation of Urjit Patel as the RBI governor. A high repo rate means high-interest rates on loan EMIs, including home loans, which burns a hole in common man's pocket.
The headline inflation in India is moving downwards due to low inflation in food prices and fuel costs. The annual rate of inflation, based on monthly Wholesale Price Index (WPI), stood at 3.80 per cent for December 2018 as compared to 3.58 a year earlier. On the other hand, the Consumer Price Index (CPI) inflation was 2.18 in December 2018, a huge decline from 5.21 in December 2017.
Edited by Manoj Sharma