Just when there were signs of India clambering out of the pandemic-hit economy, its growth story has been affected with inflation spiralling out of control.
The focus has now shifted to reining in prices with retail or the CPI-based inflation crossing the RBI-set upper band of 6% every month since January. In an unscheduled meeting on May 4, the RBI’s Monetary Policy Committee increased the key policy rate by 40 basis points to 4.40%, the first hike in four years. This is just the beginning; more rate hikes are almost a certainty if inflation remains elevated and turns structural if it hasn’t already. With the Russia-Ukraine war continuing to unravel, high fuel prices may well continue. Global food prices too have surged to an all-time high.
As inflation trickles down to impact our everyday lives, it is time to seek answers to troubling questions: How long can retail inflation continue to remain high? Are rate hikes and absorbing liquidity the only instruments the RBI has to blunt prices? Wouldn’t it kill incipient demand and hurt growth? Is stagflation (high inflation, low growth) looming large for the Indian economy?
The Indian Express attempts to find some answers through its Explained Live webinar at 6 pm on May 20 with Neelkanth Mishra, India strategist and an analyst with Credit Suisse, who is also part-time member of the Prime Minister’s Economic Advisory Council. He will help us unpack the inflation basket, look ahead at its trajectory and better understand the nuances of policy making — both monetary and fiscal — in times of high inflation. The session will be moderated by national business editor Anil Sasi.
Through its Explained Live webinars, The Indian Express not only goes behind the headlines to make sense of news as it unfolds but breaks it down so that you understand how it impacts your everyday life. Register now for the webinar at:
http://bit.ly/3sF9MMi