Among the various macroeconomic problems afflicting India in the recent past, the industrial slowdown is one of major concern. While supply side factors such as infrastructure and input constraints, have dented confidence in the economy, this article argues that a host of demand-side factors explain the current slowdown.

India’s Wholesale Price Index (WPI) infl ation, which serves as the main policy indicator has shown some decelerating trend since 2010-11, but continues to rule high well above the comfort zone of 4.0-4.5% a year.