Useful for new learners. Modified

1. INFLATION
AND
ECONOMIC
GROWTH OF
INDIA
Dr.B.ANBAZHAGAN., M.B.A., Ph.D.,
Associate Professor
B.C.KARTHICKEYAN., B.Sc.,
Final Year MBA Student
Institute of Cooperative Management

2. Introduction
• When the general price level rises, each unit of
currency buys fewer goods and services.
• Erosion of Purchasing Power of Money

3. TRENDS OF INFLATION IN INDIA
• In 1950’s is the birth of INFLATION in
INDIA
• In 1991 Symptoms & ill effects are showed
– Financial Deficits
– Devaluation of money
– 13.9%
• In 2011 - 8.721%.

4. CAUSES OF INFLATION
• Demand Pull Inflation
• Cost-Push Inflation
• Imported Inflation
• Others

5. Demand Pull Inflation
• Aggregate demand exceeds aggregate supply
• Naturally Companies increase the PRICE
instead of increasing the Supply as per
Demand.

6. Cost – push Inflation
• PRICE raises even there is no increase in
aggregate Demand
• Non availability of the commodity.
• This may happen especially the wage cost
rises.

7. Imported Inflation
• Increase in price of imports
• Increase in price of imports is in direct relation
with the expenditure-based measure of
inflation.

8. Others
• When the country prints excess currency notes
the price increases in order to keep up with the
increase in currency that leads to inflation.
• Increase in indirect taxes leads to increase in
price of the commodities.

9. Others
• When countries borrow money, they need to
cope up with the interest burden. This interest
burden leads to inflation.
• Increase in the production and labour cost have
a direct impact on the final product, resulting
in inflation.

10. EFFECTS OF INFLATION
• Inflation's effects on an economy might be
Positive or Negative
• Business Community
• Common people
• Farmers
• Investors

11. Period Inflation
May 2014 7.018%
May 2013 10.680%
May 2012 10.10%
May 2011 8.721%
May 2010 13.907%
May 2009 8.633%
May 2008 7.752%
May 2007 6.612%
May 2006 5.925%
May 2005 3.740%

12. CONCLUSION
• The inflation in India from 1991 till date was
mostly due to the rise in crude oil prices and
food prices which made a tremendous change
in the general price level.

13. CONCLUSION
• With the introduction of the new economic
policies like Liberalisation, Privatisation and
Globalization, the economy has been affected
to a large extent because of changes happening
in the outside world in both senses good as
well as bad.

14. Thank you all
for patience
listening