Growth vs Inflation

There has been a lot of debate recently on growth vs inflation with the government pushing for reforms and higher growth. The Government has been pitching for India as an attractive option for investment, but the growth model has gone wrong. The growth has not been inclusive. Our country has more mobile phones than toilets. This growth is futile.

The unbalances growth over the years has led to a widening gap between the rich and the poor. While the rich are enjoying tax benefits, the poor are struggling to make ends meet. This gap between the rich and the poor is bad for the economy itself. It will lead to a very unstable economy.

High rates of inflation are bad for the society as well. We have 57% of our population that lives below the international poverty line of $1.25 per day. This means that even a small rise in the inflation is detrimental to the fate of millions of Indians.

In a country like India, high rates of inflation will have its political ramifications as well. Higher rates of inflation may result in political instability in the country. This would seriously affect the economic growth of the country.

Thus, for a country where a large population has minimal or no savings and lives by earning hand to mouth, we need to keep inflation in check to have any meaningful growth. Resources should be utilized in a prudent way so that the benefits are not restricted to few sections. Even if we are able to achieve lesser growth rates but with more inclusive benefits then we would be able to call our-self more progressive.

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