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MOHIT GOEL (PGDM-FINANCE)
Definitions :
“Inflation is an increase in the quantity of purchasing power.”–
What is Inflation?
Gregory

Inflation is ...
TYPES OF INFLATION & EFFECTS
Effects of Inflation
Effect depends on the speed of inflation and the nature of
the economy.
 Rising prices of imports
...
Control Measures
Monetary Policy:
Monetary Policy
essentially implies the policy
followed by financial
institutions.
High interest rates ...
Fiscal Measures
Reduction in unnecessary
expenditure.
Increase in Taxes.
Increase in savings

Adopt Surplus
Budget(col...
Other Measures
To increase Production

Rational Wage Policy

Price Control
Present Scenario
COUNTRY CATEGORY DATES
INDIA

INFLATION
RATE

1969 –
2013

ACTUAL

HIGHEST

LOWEST

6.46

34.68

-11.31

...
inflation
inflation
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inflation

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inflation

  1. 1. MOHIT GOEL (PGDM-FINANCE)
  2. 2. Definitions : “Inflation is an increase in the quantity of purchasing power.”– What is Inflation? Gregory Inflation is the stage of too much money chasing too few goods.”-Coulbourn Meaning : Inflation is a global phenomenon. It takes place because of rapidly rising prices of goods and services, resulting in the decline of the value of money. The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.
  3. 3. TYPES OF INFLATION & EFFECTS
  4. 4. Effects of Inflation Effect depends on the speed of inflation and the nature of the economy.  Rising prices of imports  Lowers national saving  Redistribution of Income & Wealth  Collapse of Monetary system  Adverse impact socially and politically  Discourages Investment & savings  Higher Interest / Income tax rates
  5. 5. Control Measures
  6. 6. Monetary Policy: Monetary Policy essentially implies the policy followed by financial institutions. High interest rates and slow growth of the money supply are the traditional ways through which central banks fight or prevent inflation.
  7. 7. Fiscal Measures Reduction in unnecessary expenditure. Increase in Taxes. Increase in savings Adopt Surplus Budget(collecting more revenue and spending less). Stop Repayment of Public Debt until inflationary pressures are controlled.
  8. 8. Other Measures To increase Production Rational Wage Policy Price Control
  9. 9. Present Scenario COUNTRY CATEGORY DATES INDIA INFLATION RATE 1969 – 2013 ACTUAL HIGHEST LOWEST 6.46 34.68 -11.31 The inflation rate in India was recorded at 6.16 % in December-2013. From 1969 until 2013, India Inflation Rate averaged 7.7% Highest 34.7%September -1974 Lowest -11.3 % in May -1976 The average inflation of India in 2013: 11.04 % UNIT PERCENT FREQUENCY MONTHLY

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