INFLATION IN INDIA

BY:- AMIT CHAKRABORTY

CLASS:- MBA 2ND SEM
ROLL:- 02
 Index
• Introduction
• Types of Inflation
• Calculation
• Causes
• Effects of Inflation
• Measures to Control Inflation
• Inflation in India (Present scenario)
Introduction

Inflation
 Definitions
• Inflation can be defined as the general
tendency for prices to rise and a decline in
the purchasing power of money.
 Types of Inflation
Moderate Inflation
•
Running Inflation
•
Galloping Inflation
•
Hyper Inflation
•
 Calculations
If P0 is the current average price level and P-1is the
price level a year ago, the rate of inflation during the
year might be measured as follows:

After the year the purchasing power of a unit of

money is multiplied by a factor 1 / ( 1 + inflation)
 Causes of Inflation
• DEMAND PULL INFLATION
• COST - PUSH INFLATION

03/09/10 7
 Effects of Inflation
• Wage Earners
• Producers
• Fixed Income Group
• Borrower & Lender
• Tax Revenue
 Control Measures of Inflation
Inflation

Monetary policy Fiscal policy Wage policy

•Change in Bank Rate •Public Expenditure
•Open Market Operation •Public Borrowings
•Variable Cash Reserve •Public Revenues
Ratio
 Inflation in India
• Inflation Rate in India calculated at the end of Jan was
8.56%, the highest in over 13 months. (PTI 15th Feb 2010)
• RBI increases CRR by 75% to suck out
Rs 36,000 crore from the financial system
(The Wall Street Journal, 15th Feb 2010)
• Govt. of India is estimating Inflation to cross 10% by the
end of March, 2010
(REUTERS Feb 17th ,2010)