Stagflation
is the state of the economy when there are rise in prices along with
unemployment unlike inflation wherein maximum capacity of the economy is not
achieved and there is increase in prices and income simultaneously thereby
providing employment to the people.
It
can said that there is Stagflation in India because:
1). Highest unemployment of 7%
2. Rise of prices can be judged
through WPI, CPI and PPI
3. As per the leaked consumption
expenditure report, there is fall in household consumption which shows there is
reduction in income level of the households.
Following structural policies needed
to curb this economic slowdown
1. Restructuring of the financial
sector to plug loopholes which were witnessed in IL & FS, Karvy etc
2. Tackling increase NPA of the banks
to cleanize their balance sheets so that they boost economy.
3. Generation of employment by
boosting manufacturing and service sector
4. Prices control and better return
for farmers by lifting the agriculture sector out of peril.
5. Ensuring Financial Inclusion.
5. Ensuring Financial Inclusion.
Recent
estimates of unemployment, GDP projection and Consumer Expenditure Report are
worrisome and requires immediate attention.