The main cause of inflation is the increase in the demand of goods and services and at the same time decrease in the supply of goods and services.
MOHIT GOEL (PGDM-FINANCE)
“Inflation is an increase in the quantity of purchasing power.”–
What is Inflation?
Inflation is the stage of too much money chasing too few goods.”-Coulbourn
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.
Effects of Inflation
Effect depends on the speed of inflation and the nature of
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
essentially implies the policy
followed by financial
High interest rates and
slow growth of the money
supply are the traditional
ways through which central
banks fight or prevent
Reduction in unnecessary
Increase in Taxes.
Increase in savings
revenue and spending less).
Stop Repayment of Public
Debt until inflationary
pressures are controlled.
To increase Production
Rational Wage Policy
COUNTRY CATEGORY DATES
The inflation rate in India was recorded
at 6.16 % in December-2013.
From 1969 until 2013,
India Inflation Rate averaged 7.7%
-11.3 % in May -1976
The average inflation of India in
2013: 11.04 %