This document discusses food inflation in India. It defines inflation and food inflation, noting that food inflation is calculated based on the wholesale price index. The document then lists several causes of food inflation in India, including rising production and labor costs, food exports, speculation, and inefficient agriculture. It also discusses the impact of high food inflation, such as loss of purchasing power and the need for many Indians to borrow money. The document concludes by recommending government measures to control inflation like revised monetary policies and increasing agricultural productivity.

1. FOOD INFLATION IN INDIA
BY G.SURAJ
3-BBA-’B’
ROLL:NO:’52’
REG:NO:126BU252

2. WHAT IS INFLATION
 INFLATION IS A SUSTAINED RISE IN THE
GENERAL LEVEL OF PRICES OF GOODS
AND SERVICES IN AN ECONOMY OVER
A PERIOD OF TIME.
 AS INFLATION RISES THE VALUE OF
EVERY RUPEE YOU OWN DECREASES.
 THEREFORE EVERY RUPEE YOU OWN
BUYS A SMALLER PERCENTAGE OF
GOODS AND SRVICES.

3. FOOD INFLATION
 FOOD INFLATION IS THE RISE IN
PRICES OF FOOD ITEMS.
 IT IS CALCULATED ON THE BASIS OF
THE WPI ( WHOLESALE PRICE INDEX )
 IT IS CALCULATED BY THE CENTRAL
STATISTICAL ORGANISATION (CSO )
 THOUGH THE CURRENT RATE IS 9.16 IN
SEP 2014 , FOOD INFLATION HAS EVEN
TOUCHED DOUBLE DIGITS(19.33 IN late
2013)

4. CAUSES OF INFLATION
 RISE IN PRODUCTION COST AND LABOUR COST.
 EXPORT OF FOOD PRODUCTS
 SPECULATION
 HIGH TRANSPORTATION COST
 HOARDING OF FOOD
PRODUCTS
 EXPLOITATION OF LAND

5. OTHER REASONS:
 RAISE IN MARGINAL SUPPORT PRICES
 POPULATION AND CLIMATE CHANGES
 IGNORANCE AND LACK OF
TECHNOLOGY IN THE AGRICULTURE
SECTOR.
 DIVERSIFICATION OF DIET TOWARDS
HIGH VALUE FOODS.

8. INDIANS SPENDING PATTERN

9. IMPACT OF FOOD INFLATION
 A LARGE SECTION OF THE PEOPLE
ARE LOSING OUT ON THEIR
PURCHASING POWER.
 CORRUPTION IN PDS SHOPS.
 FORCES COMMON MAN TO BORROW
MONEY FROM BANKS AND OTHER
FINANCIAL INSTITUTIONS.
 IT WILL BRING DOWN INDIA’S
ECONOMIC GROWTH.

10. GOVERNMENT RECOMENDATIONS
 REVISED MONETARY POLICIES.
 OPEN UP SEVERAL SUPPLY
OUTLETS
 REDUCE TAXES ON FOOD
ITEMS.
 UTILITY FOOD ITEMS ON
SUBSIDISED RATES.

11. GOVERNMENT MEASURES
 EFFECTIVE USE OF MONETARY POLICIES
WITHOUT AFFECTING GROWTH RATE.
 INCREASE IN PRODUCTIVITY OF
AGRICULTURAL LAND.
 IMPLIMENT ESSENTIAL COMMODITIES
ACT.
 REDUCE THE GAP BETWEEN THE FARM
PRICE AND THE RETAIL PRICE.

12. SOME SUGGESTIONS
 Buy in bulk and store products whose prices are
likely to go up
 Consumers should take advantage of attractive
offers at discount chains
 Start cutting down on discretionary consumption
 Do comparison shopping
 Downgrade if your favourite brand is a premium
one and the category doesn’t have much
differentiation
 Control your consumption of high-priced items
 Use substitutes and postpone consumption of
certain items

13. CONCLUSION
 POOR MONSOON, FLOODS, SPECULATION , LACK OF
TECHNOLOGY AND HOARDING OF FOOD GRAINS PAVED A
WAY FOR INFLATION WHICH HAS MADE THE LIVING OF
MIDDLE INCOME GROUP CONSUMERS HECTIC.IN ORDER
TO KEEP PACE WITH THE GROWING POPULATION , THE
FOOD PRODUCTION ALSO HAS TO GROW . GOVERNMENT
HAS UNDERTAKEN SUITABLE MEASURES SUCH AS BAN ON
EXPORT OF ESSENTIAL COMMODITIES AND BANK HAS
VARIED RESERVE RATIOS SUCH AS CRR (6%), REPO RATE
(6.50%), SLR (24%), EVEN THE SAVING BANK DEPOSIT’S
RATE OF INTEREST HAS BEEN HIKED TO OVERCOME
PROBLEM OF INFLATION. BUT STILL THE PROBLEM
PERSISITS. THEREFORE IT IS IMPORTANT THAT THE
GOVERNMENT IMPLEMENTS LONG TERM REFORMS , TO
ENSURE THAT THIS PROBLEM DOES NOT ARISE IN
FUTURE.

14. THANK
YOU.....