affinor

Outlook for the Indian Economy

Very well written article. But I do feel one aspect of rising inflation has been missed by the author.

Considering that vehicle ownership in india is not very large, a lot of inflationary pressure comes from agricultural commodities. With the rising food prices, there has been a significant increase in investment in agriculture as evident from the agri export numbers. It is however hard to accurately incorporate contribution from this into the GDP as a lot of commodities (esp vegetables) are a part of a very disorganized and local market. This contribution however is vital in the long run in distributing income far from the financial centers in the metros. As long as the government is not too punishing on the export-import policies, a growth of even 7% with the added agri contributions should be better for India