The empirical findings suggest supply-side shocks such as spikes in commodity prices along with tighter financial conditions and relatively higher depreciation of domestic currency are the major determinants of stagflation risk in India, concluded a paper written by Deba Prasad Rath, Silu Muduli and Himani Shekhar in a paper titled ‘Low Stagflation Risk in India.
According to an analysis by RBI officials, the Covid pandemic did not result in a reduction in research and development (R&D) expenditure by Indian companies. The analysis looked at data from 1,161 companies and found that the likelihood of companies engaging in R&D activities remained unchanged during the economic slowdown caused by the pandemic. The paper suggests that the resilience of R&D activities bodes well for sustained innovation and productivity growth in India in the post-Covid period.
The central bank s staff, including Deputy Governor Michael Patra, wrote in a paper that sequential momentum of core inflation is declining, providing further proof of easing inflationary pressures
"The SFBs have been provided license with the objective to serve the under-served and marginalised sections of the society.preliminary analysis reveals SFBs to be leading in serving the priority sector," the paper by Nitin Kumar and Sarita Sharma said.