Inflation in India

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Inflation in India

  1. 1. Why is inflation bad?
  2. 2. “ For every percentage increase in food prices, an additional 16 million people are threatened with hunger.”                 P. Chidambaram, former Finance Minister. <ul><li>According to the World Bank report, rising global food prices are contributing to high inflation in many countries </li></ul><ul><li>When prices rise, some sections of society gain while other sections lose </li></ul>
  3. 3. Inflation on ground !! <ul><ul><li>Inflation has always been a pressing socio-political concern in India </li></ul></ul><ul><ul><li>vast majority of our working people receive incomes that are not </li></ul></ul><ul><ul><li>indexed to prices </li></ul></ul><ul><ul><li>The wages of those in unorganized sector is not compensated by </li></ul></ul><ul><ul><li>periodical wage and salary hikes based on the consumer price index </li></ul></ul>
  4. 4. RESPONSE OF THE GOVERNMENT <ul><ul><li>“ higher prices were inevitable” </li></ul></ul><ul><li>- President of India </li></ul><ul><ul><li>Government claimed that this was the result of three forces, two of these are completely out of the government's control </li></ul></ul><ul><ul><ul><ul><ul><li>Cost-push effect </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Demand-pull effect </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Supply shocks </li></ul></ul></ul></ul></ul>
  5. 5. MISMANAGEMENT BY OBJECTIVE (MBO) <ul><li> When there is a terrorist attack the government blames everybody except itself and its security agencies. When the prices are going through the roof causing untold misery all around, it blames the rain Gods and it does not admit the real cause of inflation which is the cumulative effect of its mistake in ignoring the agricultural sector, its failure to check profiteering by middlemen. </li></ul>
  6. 6. Contd.. <ul><li>The import that was not </li></ul><ul><li>PDS Fiasco </li></ul><ul><li>The bitter truth of sugar </li></ul><ul><li>Excise duty or an exercise for a common man </li></ul><ul><li>Baffling buffer stock </li></ul>
  7. 7. WHAT CAN BE DONE? <ul><li>Overhaul institutions like the Indian Council of Agriculture Research (ICAR), Agriculture Universities and the food distribution systems </li></ul><ul><li>Stringent punishment for Black hoarders </li></ul><ul><li>Address Global Warming and Climate Change </li></ul><ul><li>Conserve every drop of water </li></ul><ul><li>Universal consensus on Genetically Modified food </li></ul><ul><li>connect farmer and the end user </li></ul>
  8. 8. Contd.. <ul><li>Proper enactment of the Rural Employment Guarantee Act </li></ul><ul><ul><li>Special Agricultural Zones (SAZ) in line with Special Economic Zones (SEZ) </li></ul></ul><ul><ul><li>Control population, in turn to control the future demand </li></ul></ul><ul><ul><li>small and marginal farmers should have equal access to credit, fertilizer, improved seeds, pesticides, electricity, and water </li></ul></ul>
  9. 9. <ul><li>JAI HIND </li></ul>

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