With the onset of a ‘once in a century’ shock like the Covid-19 pandemic, India suffered the deepest contraction in the world. As the economy started recovering from the pandemic with the support of conventional and unconventional fiscal and monetary policy measures, the outbreak of war in Ukraine up-ended the situation. It has altered the trajectory of the world economy drastically. International commodity prices, especially the price of crude oil, shot up significantly. Globally and domestically, the supply chain pressure built up, leading to input cost escalation and mounting pressure on Consumer Price Index (CPI) inflation. Against this backdrop of a rapidly changing macroeconomic environment, we examine if the inflation dynamics have changed its course. Using the New Keynesian framework, we investigate whether the attributes of the inflation process, like nominal friction, indexation to past inflation and the long run level of inflation have undergone a structural shift; and if so, what are the possible macroeconomic consequences of the same. At the outset, we compare the empirical regularities in the price data of our CPI basket between pre- and post-pandemic periods. Next, we explore the 

potential outcomes of the stylized facts using a prototype DSGE model with relevant illustrations.

The PEFA assessment will provide a framework for assessing and reporting on the strengths and weaknesses of public financial management (PFM) using quantitative indicators to measure performance. The performance indicators focusing on key PFM elements, with evidence based assessments and scoring methodology, will facilitate identifying appropriate future reform agenda including entry points in areas not covered presently. Therefore, the PEFA assessment will help Government of Uttarakhand identify the next level of priority areas for further PFM reforms.