For most part of the last 12 months, a sticky spell of high prices has been the biggest problem for the UPA government. Latest price data, however, show that the government seems to be within striking distance of conquering this crisis. Retail inflation in January fell to a two-year low of 8.79% and that gives some reason to rejoice in these strained times.
The time to open the bubbly, however, may still be some distance away. India’s factory output measured by the index of industrial production fell 0.6% in December—the third consecutive month of contraction. This confirms what experts have been warning about: a deep economy-wide squeeze.
Pushing growth is critical to spin jobs and multiply income. Containing runaway inflation has important electoral significance. An equilibrium for both objectives doesn’t seem to be in sight as yet.