Macro economics Inflation

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Inflation

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Macro economics Inflation

  1. 1. Group 14Harendra Singh FT 12127Revathi B FT 12151Rituparna Kashyap FT 12152Ronak Kumar Jain FT 12153Tushar Arora FT 12168
  2. 2. Definition: Inflation is defined as a percentage change in price level for goods and services over a period of time. With the rise in inflation the purchasing power decreases.
  3. 3.  Demand Pull Inflation Cost- Push Inflation Structural Inflation Monetary Inflation
  4. 4.  Inflation in India is due to combination of the factors – structural and less monetary. Structural ◦ High commodity(Pulses, rice, milk, egg and fish etc)price, fuel price hike. ◦ Change in Economic Structure (change in structure of economies as happened in India from Agricultural Structure to Industrialization to Services• Monetary ◦ Government regulation to maintain economic growth during slow down.
  5. 5.  Highest Inflation rate 34.68 % in September of 1974 Lowest Inflation rate -11.31% in May 1976 Current Inflation rate in India is 7.78%. In this food price index rose to7.78 and fuel price index climbed to 12.84% (as on 30th June 2011)
  6. 6.  Rising per capita consumption of food  In 2002-03 the Per Capita Income in India was Rs 19040.  In2004-05 the Per Capita Income in India was Rs 23241.  In2009-10 the Per Capita Income in India was Rs 46492. Food inflation rises due to poor agricultural output Spike in the crude oil prices
  7. 7.  Organized retail can charge lower food prices because: ◦ (1) Economies of scale in procurement (mass buying from suppliers) ◦ (2) Economies of scale in handling and logistics such as via modernized distribution centers. ◦ (3) Build regional and global food procurement networks to reduce costs, de-seasonalise offerings, and increase product diversity. The profit realization for farmers selling directly to organized retailers is about 60 per cent higher than that he would have received otherwise. The ill-practice of auctioning at the mandis will stop.

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