The Headline Inflation Number is back to normal again. It rose from 3.7% to 12.1% between 2001 and 2010. The inflation rate has since fallen again, reaching 3.7% in February 2017
Just see the chart
Let's understand the context
In India...what made living difficult for the vast majority of a population between 2010 and 2013: Unbearable Inflation. The way money lost its value then is incredible. Rs. 100 became a Rs. 10 note. The Rs. 1000 note became the new Rs. 100 note.
Well: Here's real issue: Inflation - It hurts poor more than rich. It makes everyday living difficult. More NREGA, Food sec = more inflation
— Deepak Singh (@smarket) July 11, 2012
Why Inflation spiked?
2008-2012 has been period of HYPER INFLATION thanks to huge Govt spending on non sense schemes..and its unbearable now
— Deepak Singh (@smarket) September 19, 2012
The economic policy of UPA was a disaster
The current UPA Government seems hellbent on destroying economic growth and creating environment of shortage and high inflation.
— Deepak Singh (@smarket) November 7, 2011
The Anger in Society was there for everyone to see (Huge Support for Anna movement)
A growth that generates high inflation leads to massive public retaliation and anger: policy makers should always be aware of that
— Deepak Singh (@smarket) June 15, 2012
What made Inflation problem worse: Imported Inflation?
Remember when INR depreciates, then it costs more to import. Just look at how INR depreciated
India is struggling with inflation and everytime INR depreciates...it means higher imported inflation coming in from Oil.
— Deepak Singh (@smarket) February 12, 2013
You take a plane up in the air (economic growth) and then crash (fall in growth) it on poor junta (inflation)....story of UPA Govt
— Deepak Singh (@smarket) March 12, 2013
When you are doing badly, and you see few corrupt folks making the most of the situation - the anger multiples
When money goes to create capacities then we have low inflation (Pvt investment); not when it goes in hands to create demand (Govt spending)
— Deepak Singh (@smarket) August 7, 2013
Modi Govt came to Power in 2014 and since then Govt has been very careful on Inflation.
Govt has not let Fiscal deficit go out of hand.
INR has been super stable despite huge USD rally between 2014-2016
Yes...India was staring at structural inflation problem back in 2013 and Thank God....now that's no longer a concern. The current Low inflation base will set the stage for a powerful economic growth ahead.
Winning the war on inflation is a pre-requisite for long term sustainable growth and BJP Govt has done super job by winning this war.