Historically, the Congress party’s rural vote-buying techniques have always resulted in high inflation. If we look at CPI annual averages in the past, whenever the Congress has ruled the country, inflation has soared.
In the 1991-96 period, the first five years of reforms under Manmohan Singh , average CPI (industrial workers) was 10.2%. In the next two years of the United Front government, this average fell to 8.1%. Inflation really tumbled to 5.4% during NDA rule from 1998-2004, setting the stage for faster growth with low inflation.
This is the benefit that UPA-1 reaped, but, thanks to its usual profligacy, inflation has again started soaring from the levels achieved during NDA. During the first eight years of UPA (up to 2011-12), inflation has already averaged 7.7%. But take the initial years out, when the Indian economy was in the sweet spot created by global growth and NDA’s low inflation, and the UPA’s real record surfaces: inflation averaged over 10% in 2008-12, till growth came crashing down in 2012-13. Read More