Article;
Indian Economy not Facing Stagflation, Growth is Picking-Up -RaghuramRajan
Comment;
Indian economy
is stagflating… What is stagflation? Low growth rate and high inflation.
India’s growth performance has been low than its previous performances, before
2012. India was growing 9% but now the growth rate is 5%, since past one year.
India’s growth performance is good when we compare India with the West but low
when compared to China and India’s previous performances. Basically it is low
growth rate given India’s population and poverty. Moreover, as far as inflation
is concerned it is also pointing in the same direction, stagflation. Inflation
in India is 7% (WPI) and CPI above 10%. When we compare India’s inflation with
other countries we find that others have chosen 2% inflation for themselves, in
the west, and, complete price stability in China. Inflation in China is 3%. No
matter what target we set for ourselves but theoretically we need complete
price stability if we are not trying to break recession. India’s inflation is
high. Therefore, on both fronts, growth rate and inflation, the present
situation suggests a stagflation type scenario.
As far as sticky
inflation is concerned CPI is around 10% since 2004…
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