Is India facing the Condition of Stagflation?

Stagflation is commonly referred to a situation of low growth and high inflation. In this low growth situation central banks and government try to stimulate the economy through higher public spending and low interest rate to create demand. These measures also tend to increase prices and cause inflation. So these tools can not be adopted when inflation is already running high, which makes it difficult to break out of low growth – high inflation trap.

In India, inflation is higher but the growth of the country is not bad as it is about 5% (growth in industry has been low but positive). Of the large countries of the world, only China and Indonesia are growing faster than India in 2012-13. In 2013-14, only China projected to grow faster than India. So, we could say that India is not facing the condition of stagflation.