With the IMF predicting that the Indian economic growth would dip to 7.9% this financial year, this article examines whether the inflation dampens or boosts the Indian economic growth.

It is generally believed that inflation depresses economic growth and, therefore, political parties of all hues think that it adversely affects the common man and their vote banks. This view is largely held by democratic countries emerging as developed countries of the world. The conventional wisdom is that in case the monetary policy of a country is too focused on controlling inflation then output and employment growth may fall below their potentials and may also make the financial market of the country volatile. It is, therefore, imperative for policy-makers and politicians in growth-oriented developing countries to be careful in adopting monetary and fiscal policies to control inflation so that their economic growth rate is not impeded in any manner.

In today's economic scenario, it is necessary to adopt such policies to counter inflation that will not impede economic growth if not give boost to it. It is an established fact that price stability and economic growth are mutually-consistent goals, but it is also becoming more and more obvious that price stability does not construe, in today's economic scenario, no rise or fall in price level.

Portfolio Organizer Magazine, Economic Growth, Monetary Policy, Financial Market, Policy-Makers, Cash Reserve Ratio, CRR, Reserve Bank of India, RBI, Fiscal Measures, Indian Inflation, Economic Developments, Policy Markers, Fiscal Policies.