This document discusses inflation, defining it as a general increase in prices and a decline in the purchasing power of money. It outlines different types of inflation from creeping to hyperinflation. The main causes of inflation are described as too much demand and too little supply, which can be demand-pull or cost-push inflation. Effects include rising import prices, lower savings, and impacts on investment. Control measures discussed are monetary policy like interest rates and fiscal steps like tax increases. Present inflation rates in India are provided, ranging from -11% to 34% between 1969-2013, with an average of 7.7% over that period.

1. Inflation
- Mayur Khatri (2027)

2. Contents : A glimpse of what is to come
•Meaning and Definitions
•Types of Inflation
•Theories and causes of Inflation
•Effects of Inflation
•Control Measures
•Present Scenario

3. Definitions :
What is Inflation?
“Inflation is an increase in the quantity of purchasing power.”–
Gregory
Inflation is the stage of too much money chasing too few
goods.”-- Coulbourn
Meaning :
Inflation is considered 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.

4. Types of Inflation
-Creeping Inflation
-Walking or trotting Inflation
-Running Inflation
-Galloping Inflation
-Hyper Inflation

5. Theories and Causes of Inflation
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.
There are two theories related to the causes of inflation:
Demand-pull (when there is excess demand), and
Cost-push (when costs rise)

6. Theories and Causes of Inflation
 Demand Pull Inflation –
This occurs when there is excess aggregate demand in the
economy (overall) or in a specific market or industry.
Businesses respond to high demand by
raising prices to increase their profit margin

7. Theories and Causes of Inflation
 Cost – push Inflation :
This occurs when costs of production or operation are
increasing.
 Cost Push inflation is mainly caused due to the following
factors:
·
increase in wages.
·
increase in cost of
raw materials
·
increased cost of
imported components
(import-push inflation)

8. 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

9. Control Measures

10. 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.

11. 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.

12. Other Measures

13. Present Scenario
COUNTRY
CATEGOR
Y
DATES
ACTUAL HIGHEST
INFLATIO
1969 –
6.46
N RATE
2013
The inflation rate in India was recorded
at 6.46 % in September-2013.
INDIA
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 %
34.68
LOWEST
-11.31
UNIT
PERCENT
FREQUENCY
MONTHLY

14. Thank You