IMPACT ANALYSIS OF CONSUMER PRICE INDEX ON INDIA’S GROSS DOMESTIC PRODUCT

Abstract

This paper investigates the relationship between inflation and GDP growth in India. The analysis utilizes regression analysis on data from the Reserve Bank of India (RBI) spanning 2011-12 to 2021-22 (forecasted to 2035). This technique allows us to quantify the strength and direction of the association between Consumer Price Index and GDP growth. The analysis finds that while GDP has grown in recent years, inflation has remained high. This could lead to a situation where economic growth does not translate into improved purchasing power for citizens. The paper suggests that policymakers should focus on boosting productivity and competition alongside responsible fiscal and monetary policies to achieve sustainable economic development with stable prices.