Rate of Inflation Between India and Developed Countries in the Recent Scenario

Abstract

Inflation is a crucial economic indicator used to assess the health of an economy, with the potential to create both positive and negative outcomes. Inflation rates can affect the decision-making process of key players in the economy such as producers, consumers, and policymakers. Therefore, maintaining a desirable rate of inflation is crucial for sustaining stable economic growth in the country. This study aimed to examine the difference in the rate of inflation between India and developed countries such as Germany, the UK, and the USA. The study utilized secondary data collected between 2010 and 2022 and applied descriptive statistics to assess the nature of inflation between the countries. The results indicate that India has been experiencing a high rate of inflation, while the developed countries have been experiencing moderate, creeping inflation during the study period. During the post-pandemic scenario, the rate of inflation in developed countries was found to be significantly higher than that of India. The study suggests that the government should implement a tight monetary and fiscal policy, similar to India’s, to maintain a moderate level of inflation in the country over time. Furthermore, political leaders have to maximise spending more on productive projects and minimize unproductive public expenditure to maintain fiscal and sustained price stability and achieve sustainable economic growth.