Budget 2019: What is Stagnation?

Nirmala Sitharaman, India’s first full-time female Finance Minister, will present the first budget of Narendra Modi-led government's second term on July 5.

Taking up the crucial Finance Ministry portfolio, Sitharaman has a big task at hand. In her new role, the former defence minister needs to address issues such as economic slowdown, unemployment rate which is at a 45-year high, severe agrarian crisis, NPAs marring the banking sector.

While all eyes will be on Budget 2019, it is imperative for people to know the key terms associated with the annual exercise.

Here’s a lowdown on some of the important terms to help understand the Budget.

Stagnation:
When the prices of basic necessity goods such as food and medicine rise for a long period of time but the salary of people becomes stagnant then it is called stagnation. Stagnation is a very severe issue and decreases the purchasing power of the people. Stagnation also leads to poverty.

Also Read: What is Deflation and Disinflation?