Inflation in india 1 Presented By:- Bhanwar Singh MBA 4th Sem Krupanidhi Business School
INFLATION “Inflation is nothing more than a sharp upward rise in price level.” “Too much money chasing, too few goods.” “Inflation is a state in which the value of money is falling i.e. price are rising.” 2 INFLATION in india Based on the wholesale price index, rose to 9.89 percent in February from 8.56 percent in the previous month, official data revealed Monday. The annual inflation rate was 3.5 percent in February 2009.
KINDS OF INFLATION On the basis of rate of inflation On the basis of degree of control On the basis of causes Others 3 CAUSES OF INFLATION
Demand pull inflation
Cost push inflation
INFLATION RATES 5
EFFECTS OF INFLATION Make it difficult for companies to budget or plan long-term. The future purchasing power of money discourages investment and saving. 6
There can also be negative impacts to trade from an increased instability in currency exchange prices caused by unpredictable inflation.
Higher income tax rates.
This will increase imports and reduce exports, leading to a deficit in the balance of trade.
Increase in the price of wheat
Increase in the price of world oil
Increase in the price of rice
Increase in the price of CNG
Food Price Inflation 7
Impact on Indian GDP Growth 8
Increase In Price of Necessary Things 9
Impact on Different Levels Persons 10 Inflation Kills Wages In Sectors
HOW TO CONTROL INFLATION Monetary Measures Fiscal Measures Other Measures 11
Demonetization of Currency
Issue of New Currency
Reduction in Unnecessary Expenditure
Increase in Taxes
Increase in Savings
To Increase Production
Rational Wage Policy
WHAT IS RBI DOING FOR IT ? RBI is going to increase in interest rate of all types loan. RBI is also cut down the dept rate. RBI is also doing work for to control the credit. RBI hikes repo, reverse repo rates by 25 bps:TheReserve Bank of India (RBI) today raised key policy rates by 25 basis points (bps) to mark a reversal of its easy monetary policy regime to tame inflation and anchor inflationary expectations. 12