The Goldilocks lock on the budget | Number Theory
An HT analysis of relevant statistics shows that India’s current low inflation environment is not an unambiguous blessing for economic policy at large
If there is one phrase which has stuck as far as the current state of the Indian economy is concerned, it is the RBI Governor’s description of the Indian economy in his statement after the December 2025 Monetary Policy Committee (MPC) meeting.
”Inflation at a benign 2.2% and growth at 8.0% in H1:2025-26 (the first half of the current financial year) present a rare Goldilocks period”, Governor Sanjay Malhotra said. This is a state where the economy is neither too hot (to trigger inflation) nor too cold (where growth has collapsed), much like the porridge in the fairy tale. While the characterization of the Indian economy holds well when one is talking about real numbers, there is a good reason to apply some caution when it comes to analysing the economy before the budget, which is an exercise based on nominal numbers. An HT analysis of relevant statistics shows that India’s current low inflation environment is not an unambiguous blessing for economic policy at large. Here is why.
