Reasons for current
inflationary situation in
India & measures by RBI
- DEBANSHU GHOSH
13DM013
- PRITAM SAHOO
13DM050
CAUSES OF INFLATION
A.
•
•
•
•
B.
•
•
•
•

Factors causing increase in demand for goods & services :
Increase in money sup...
CURRENT INFLATION RATE

In October of 2013, India’s annual headline inflation rose for the fifth
straight month to an eigh...
 The index for food prices eased to an annual 18.19% slower
than the annual rise of 18.4% in September. On a monthly
basi...
CURRENT INFLATION RATE
IN INDIA
CPI INFLATION INDIA

NOVEMBER 2013 : 11.24%
CHART – CURRENT CPI
INFLATION INDIA ( Yearly basis )
– Last 12 Months

The CPI inflation rates in the table are presented ...
Inflation (monthly basis)

inflation

Inflation (yearly basis)

inflation

october 2013 - september 2013

1.26 %

october ...
RUPEE SLIDE
HOW IS INFLATION
MEASURED?
Inflation is measured by a statistical tool known as index number.

In India, there are 5 major...
GENERAL MEASURES BY RBI
RBI measures inflation by Monetary policy.
Policy through which the central govt. & The central ba...
CURRENT MEASURES
TAKEN BY RBI
 Facing some of the fiercest price pressures
in Asia, the RBI lifted its policy repo rate
b...
CURRENT RATES
Bank Rate (BRP) : 8.75% (w.e.f. 29/10/2013)
Decreased from 9.00% which was continuing since 07/10/2013

Cash...
Repo Rate under LAF : 7.75% (w.e.f. 29/10/2013)
Increased from 7.50% which was continuing since 20/09/2013

Reverse Repo R...
RECENT NEWS ABOUT OMO
 RBI has decided to purchase Rs 8000crs government bond
to keep the system adequately supplied with...
THANK YOU
Reasons for current inflationary situation in india &
Reasons for current inflationary situation in india &
Reasons for current inflationary situation in india &
Reasons for current inflationary situation in india &
Reasons for current inflationary situation in india &
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  • The inflation rate in India was recorded at 7 percent in October of 2013. Inflation Rate in India is reported by the Ministry of Commerce and Industry, India. From 1969 until 2013, India Inflation Rate averaged 7.7 Percent reaching an all time high of 34.7 Percent in September of 1974 and a record low of -11.3 Percent in May of 1976. In India, the wholesale price index (WPI) is the main measure of inflation. The WPI measures the price of a representative basket of wholesale goods. In India, wholesale price index is divided into three groups: Primary Articles (20.1 percent of total weight), Fuel and Power (14.9 percent) and Manufactured Products (65 percent). Food Articles from the Primary Articles Group account for 14.3 percent of the total weight.
  • Current inflation India - this page features an overview of current inflation in India. Following inflation rates are available for India: Current inflation India (CPI India) – the inflation is based upon the Indian consumer price index. The index is a measure of the average price which consumers spend on a market-based "basket" of goods and services. Inflation based upon the consumer price index (CPI) is the main inflation indicator in most countries.
  • Reasons for current inflationary situation in india &

    1. 1. Reasons for current inflationary situation in India & measures by RBI - DEBANSHU GHOSH 13DM013 - PRITAM SAHOO 13DM050
    2. 2. CAUSES OF INFLATION A. • • • • B. • • • • Factors causing increase in demand for goods & services : Increase in money supply Increase in governmental & private expenditure Decrease in tax rates High growth rate of population Factors causing decrease in supply of goods & services : Scarcity of factor & non- factor inputs Strikes & lockouts in business firms Increase in exports Illegal activities like black marketing & hoarding
    3. 3. CURRENT INFLATION RATE In October of 2013, India’s annual headline inflation rose for the fifth straight month to an eight-month high of 7 percent, mainly due to higher prices of fuel and manufactured goods.
    4. 4.  The index for food prices eased to an annual 18.19% slower than the annual rise of 18.4% in September. On a monthly basis, it declined 0.4 percent due to lower prices of ragi and maize (5% each), tea (4%) and poultry chicken, fruits and vegetables and fish-marine (3% each).  Energy costs were up 10.33% year-on-year, slightly up from 10% in the previous month. On a monthly basis, it increased 0.9%.  Prices of manufactured goods accelerated to 2.5%, up from 2% in September. From September to October, it went up 0.4%. Build up inflation rate in the financial year so far was 6% compared to a build up rate of 4.66% in the corresponding period of the previous year.
    5. 5. CURRENT INFLATION RATE IN INDIA CPI INFLATION INDIA NOVEMBER 2013 : 11.24%
    6. 6. CHART – CURRENT CPI INFLATION INDIA ( Yearly basis ) – Last 12 Months The CPI inflation rates in the table are presented both on a monthly basis, compared to the month before, as well as on a yearly basis, compared to the same month last year.
    7. 7. Inflation (monthly basis) inflation Inflation (yearly basis) inflation october 2013 - september 2013 1.26 % october 2013 - october 2012 11.06 % september 2013 - august 2013 0.42 % september 2013 - september 2012 10.70 % august 2013 - july 2013 0.85 % august 2013 - august 2012 10.75 % july 2013 - june 2013 june 2013 - may 2013 may 2013 - april 2013 april 2013 - march 2013 1.73 % 1.32 % 0.88 % 0.89 % july 2013 - july 2012 june 2013 - june 2012 may 2013 - may 2012 april 2013 - april 2012 10.85 % 11.06 % 10.68 % 10.24 % march 2013 - february 2013 0.45 % march 2013 - march 2012 11.44 % february 2013 - january 2013 0.90 % january 2013 - december 2012 0.91 % december 2012 - november 2012 0.46 % november 2012 - october 2012 0.46 % february 2013 - february 2012 12.06 % january 2013 - january 2012 december 2012 - december 2011 november 2012 - november 2011 11.62 % 11.17 % 9.55 %
    8. 8. RUPEE SLIDE
    9. 9. HOW IS INFLATION MEASURED? Inflation is measured by a statistical tool known as index number. In India, there are 5 major national indices for measuring changes in the price levels - WPI (1) & CPIs (4) i. WPI ( Whole Sale Price Index) ii. CPI (Consumer Price Index) iii. GDP Deflator
    10. 10. GENERAL MEASURES BY RBI RBI measures inflation by Monetary policy. Policy through which the central govt. & The central bank of the country regulate the money supply in the economy with a view to ‘correct inflationary or deflationary situation’ in the economy & have monetary stability. ‘Monetary Policy’ is implemented through the use of ‘Monetary Instruments’ :i. ii. iii. iv. Bank Rate Policy (BRP) Variable Cash Reserve Ratio (CRR) Open Market Operations (OMO) Statutory Liquidity Ratio (SLR)
    11. 11. CURRENT MEASURES TAKEN BY RBI  Facing some of the fiercest price pressures in Asia, the RBI lifted its policy repo rate by 25 basis points (bps) to 7.75 percent, in line with expectations in a Reuters poll.  With the rupee having stabilised after a steep May-August slide, the RBI also lowered its Marginal Standing Facility (MSF) rate by a further 25 bps to 8.75 percent, as expected, which eases liquidity in the banking system by lowering the cost of borrowing for lenders.
    12. 12. CURRENT RATES Bank Rate (BRP) : 8.75% (w.e.f. 29/10/2013) Decreased from 9.00% which was continuing since 07/10/2013 Cash Reserve Ratio (CRR) : 4.00% (w.e.f. 09/02/2013) Announced on 29/01/2013 - Decreased from 4.25% which was continuing since 30/10/2012 Statutory Liquidity Ratio (SLR) : 23% (w.e.f. 11/08/2012) Announced on 31/07/2012 - Decreased from 24% which was continuing since 18/12/2010
    13. 13. Repo Rate under LAF : 7.75% (w.e.f. 29/10/2013) Increased from 7.50% which was continuing since 20/09/2013 Reverse Repo Rate under LAF : 6.75% (w.e.f. 29/10/2013) Increased from 6.50% which was continuing since 20/09/2013 Marginal Standing Facility (MSF) : 8.75% (w.e.f. 29/10/2013) Decreased from 9.00% which was continuing since 07/10/2013
    14. 14. RECENT NEWS ABOUT OMO  RBI has decided to purchase Rs 8000crs government bond to keep the system adequately supplied with liquidity.  To strengthen currency rate.
    15. 15. THANK YOU

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