February 13, 2019

Has India successfully tamed the inflation dragon?

In this Mint article, Research Director and Senior Fellow Niranjan Rajadhyaksha analyses the structural aspects driving inflation in India. 


"Has India finally succeeded in taming the inflation dragon? The answer has profound consequences for Indian macroeconomics. It is well known that headline inflation in India has nearly halved over the past five years. The most recent readings have been well below the central point of the target range given to the Reserve Bank of India by the government. The previous run of low inflation was in the six years to 2005, covering the tenure of the Atal Bihari Vajpayee government, as well as the first two years of the Manmohan Singh government.


It is risky to say that India has decisively won the battle against high inflation. However, the structural changes in the food market, the energy market and the monetary policy framework offer reason for hope. The inflation dragon may not have been killed as yet, but it seems to have been tamed."


Read the full article here.

Topic : Transitions / In : OP-EDS
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