West Bengal Finance Minister Amit Mitra on Tuesday said chambers in the state were concerned about the possible stagflation in India due to low growth and high inflation. Referring to the ongoing vegetable inflation in India, he said the country's GDP was slipping at a time when neighbouring Bangladesh was moving ahead. "The stagflation, I believe, is mainly due to demonetisation and the subsequent implementation of the GST. Today, we have fallen behind China and Bangladesh. At one point of time, we were No. 1," Mitra told reporters after holding a pre-budget meeting with representatives of the chambers in the state.
Stagflation is an undesirable phenomenon which has persistently high inflation with high unemployment and stagnancy in demand. As per data, Mitra said, India's GDP growth rate is likely to be 4.6 per cent for the current financial year. "I believe the stagflation is a concern among the chambers. They (representatives of chambers) said they were unable to understand the character of the ongoing inflation in the country," Mitra said. He has been saying that India is facing the prospects of a stagflation.
The rate of vegetable inflation in December it was 60.2 per cent, the minister said. In December, retail inflation has risen to a 65-month high in the backdrop of soaring vegetable prices as food inflation hit an over six-year high. According to the data released by the National Statistical Office (NSO) on Monday, the retail inflation rose to an over five-year high of 7.4 per cent in December, which was higher than the previous month's 5.5 per cent. During the meeting held at the secretariat, around 60 representatives of 19 chambers suggested their plans to help workers of unorganised sectors by involving them in various social security schemes of the state government, Mitra said. They also gave suggestions on providing training to workers to enhance their skills.