Is Helicopter money good or bad for economy??

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           It is an unconventional monetary policy of RBI to inject cash into economy through printing large sums of money. Money distribute among the general public to stimulate the economic growth. 
It is different from conventional policy of RBI. 
In conventional method rbi decrease repo rate aftermath banks gives money to common people with less interest .and  common people take more loan and use it to buy things and invest money in different business .   

Government transfers helicopter money directly to people account and people no need to pay back this money .because of this people have fear of pay back of  money so they spend their all money in market. 
The basic principle behind this is that the central banks want to increase inflation and output. 
     Therefore ;this assumption  implied that the influx of money in the economy will be used to purchase goods and service. 


      NEGATIVE  CONSEQUENCES 
1- may lead to hyper inflation.

2-  Rapid Depreciation of Rupee. 

3-  people may keep this money in their savings accounts.

                              -Pratham shankhdhar


Comments

  1. Rekha sharmaJune 7, 2020 at 12:44 AM

    This is so helpful simple language used to explain. Keep it on this type of interesting topic

    ReplyDelete
  2. The social poetJune 7, 2020 at 8:47 AM

    Special knowledge.thanks

    ReplyDelete
  3. Chetan SharmaJuly 23, 2020 at 1:30 PM

    Keep writing such informative blogs.

    ReplyDelete

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