Today, let’s explore some major economic and financial decisions of the year 2022 which directly impacted India and its citizens.
Past incidents give us a trail for the present and future. Only a few days are left for the year 2022 to end. The new year is standing at the door with a bouquet of hopes. Let's look at those big decisions of the year 2022 which had a profound impact on the economy and your wallets. These are those decisions which were very important for India in financial terms.
India's strong march in the defence sector
The government has taken several important steps to make India self-reliant in the defence sector. At this time, India has not only reduced the import of ammunition but is also exporting Indian ammunition to the world.
Promoting the ‘Make in India’ campaign, India is working on projects like missile systems, artillery gun systems, and anti-tank guided missiles based on indigenous technology. On the other hand, the government has issued more than 500 defence industrial licenses to 351 companies. Along with this, the Government of India is also working on the Defense Corridor project. This year the Indian Navy also got its first indigenous aircraft carrier INS Vikrant.
Increase in repo rate
To control the rising inflation, the Reserve Bank of India started increasing the repo rate in May 2022 so that the flow of rupees in the economy would reduce and the demand would calm down to some extent. RBI has increased the repo rate from 4% to 6.25%.
Due to the rate hike, the EMI has increased by +20% this year compared to last year. Inflation is still difficult to control, so RBI has a long way to curb inflation.
Layoffs in tech companies
According to Forbes India, 930 companies have laid off 1,46,407 employees worldwide this year. The main reason for this was the recruitment of more employees in 2021. 44 startups have laid off about 16 thousand employees this year in India. Half of this was held by 14 EdTech companies. A large number of layoffs were also seen in IT companies.
According to experts, the problem of the attrition rate of Indian IT companies is expected to go away soon, as most of the offices have started again.
Introduction of digital currency
The Reserve Bank of India launched India's first digital currency - Digital Rupee, on 1st November 2022. On the other hand, on December 1, 2022, the first trial for the Retail Digital Rupee was initiated in 4 cities. The digital rupee will be used through a digital wallet offered by banks.
According to the Reserve Bank of India, the digital rupee will help strengthen India's digital economy and simplify the payment system. Dependency on cash will also reduce through digital currency.
Announcement of reduction in excise duty
People had to face many problems due to the increased petrol and diesel prices. On 21st May 2022 this year, the government announced a cut of Rs 8 per litre on petrol and diesel by Rs 6 per litre.
At the beginning of December 2021, crude oil prices were around $68 per barrel. By March 2022, the prices had gone as high as $129 per barrel due to the Russia-Ukraine conflict. This created a direct impact on your pocket.
India's attitude towards Russia
The world got divided into two sides after the Russia-Ukraine conflict started. The US and the European Union rallied against Russia. During this time, the eyes of the world were on India as to whom it would support in this struggle. Will India be able to go up against a power like the US and the European Union? But India maintained a neutral stand and continued to buy oil from Russia at concessional rates. Besides this, Russia has become India's top oil supplier, accounting for 21% of India's total oil imports.
There is pressure on India from the US and western countries to condemn the Russian attack, but India remained firm on its decision. This shows the strengthening position of India in the world.
What’s next?
The year 2022 was full of ups and downs when it came to the economy and finance. The world struggled between rising inflation and fears of recession. During such times, the economic decisions of a country are very important and India, as a developing country, passed the test with flying colours!
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