How did we get to a situation in which growth is at a decade-long low but inflation expectations are in double digits and fiscal and monetary policy are

so asynchronous?

Sajid Chinoy, senior South Asia economist, JP Morgan, says: "The answer lies in two retrospective revisions that escaped much attention some weeks ago. The Central Statistical Organisation revised GDP growth up to 8.6 per cent in 2009 -10 and a staggering 9.3 per cent in 2010-11.

There are two ways to interpret this. The charitable (but incorrect) interpretation is that India successfully decoupled from the global economy, returned to its nine per cent growth path post-Lehman, and it was only those pesky rate hikes subsequently that spoiled the party.

The more accurate interpretation is that these high growth rates are further confirmation of the laxity of fiscal and monetary policy, post-Lehman that pushed the economy to grow beyond its potential and triggered off a three-year inflationary spiral, which culminated in growth slowing - sowing the seeds of the current asymmetry of fiscal and monetary policy." Read More