India has entered into an unfavourable economic scenario with reverse outputs. Despite lockdown & poor demand in consumption, the inflation has reached 6.69% which remains above the central bank upper band 2 percent-6 percent target range.

1. Retail Panic Buying: In the Initial days of lockdown, consumers lost confidence in production and adequate supply of essentials. Thus, the commodities market rush over a shorter period of time lifted the inflation rates.

2. Opaque Management: Indian government didn't focus on the manufacturing & production lines at the pre-pandemic time which leads a hammer stroke to the economy.

3. Unplanned Economic Stimulus: The economic package announced by the govt. was not allocated in a judicious way, the rural economy & the middle class were highly hit, the sectoral allocation of funds have no relevant data yet which in turn lost confidence.

4. Collateral free-Govt. guaranteed Credit: Despite the warnings given by the banks & finance experts, govt. hammered on banks to provide collateral-free loans to the MSME at the time when the sector was performing worst. Therefore, it injected an unnecessary flow of funds in the economy at the stake of high-risk levels.

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