Study of economic factors driving high inflation and low growth in India, 2011-13

Abstract

India is a nascent country of diverse cultures, traditions, religions and castes. It is very interesting to follow the economic conditions of this country over the years. India gained its independence in 1947 and began her “tryst with destiny”. India evolved from an agrarian economy in 1947 to an economy mostly dependent on the service sector. There have been ups and downs in this journey and though we would like to see the whole journey in detail we can only see a few aspects due to the constraints of time. India is now seen as the economy with the maximum potential of growth and we hear buzz words like “Make in India” and “Make for India”. This period is poised to be the golden poster boy of the Indian economy. However, what interested us more is the way India reacted to the global economic meltdown of 2008 and why the Indian economy slowed down with high inflation rates between 2011 and 2013. To fully understand what the reasons for this slowdown were we will be looking at economic policies and decisions taken by the government like the NREGA scheme which might have impacted the economy and caused the slowdown. We also aim to explore the different channels, links and the mistakes committed which caused the slowdown and led to inflation. It is said we learn from our mistakes and we hope that the same things are not repeated again and India keeps following the path of continuous growth.