2 What can we say about demand-supply mismatch in the Indian economy?
In the sanitised world of economics textbooks, inflation is mostly a result of demand overshooting supply in the short run. The international commodity price shock notwithstanding, how much of a factor is excess demand in driving inflation at the moment in India? Lack of high frequency data makes this a difficult question to answer. However, one can try and triangulate on the probable situation with some statistics.