This document discusses inflation trends and effects in India. It defines inflation as a sustained increase in the general price level. Inflation is measured through the wholesale price index (WPI) and consumer price index (CPI) in India. The WPI tracks weekly wholesale price movements across 435 commodities, while the CPI measures average consumer goods and service prices. Effects of inflation include an inefficient market, hoarding of commodities, discouraging investment and saving, and impacts on income, imports, and exports.
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1. K J SOMAIYA COMPREHENSIVE COLLEGE OF EDUCATION, TRAINING &RESEARCH TOPIC : Inflation Trends & Its Effects. B.ED 2010 - 2011 By Silvia Fernandes Sub- Economics Roll No - 15 STD – 1X
12. The WPI number is a weekly measure of wholesale price movement for the economy.
13. Indian Government constructed its present WPI way back in 1993-94 (1993-94 series replacing 1981-82 bases) by making a basket of 435 commodities. The 100 point index is subdivided into three groups. WPI Indian Example
20. Most developed countries use the CPI to calculate inflation as this actually means the increase in price that a consumer will ultimately have to pay for.
34. Increase imports and reduced exports.Examples : Increase in the price of wheat,rice,sugar, CNG etc.
35. Evaluation What do you mean by Inflation? How is Inflation calculated? What do you mean by CPI? How does India calculate the Inflation rate? What do you mean by WPI? What are the effects of Inflation?
36. ANSWERS Inflation is general increase in price of goods and services. Inflation measured by WPI and CPI. It is the average price of consumer goods and services purchased by households. India uses the WPI to calculate the inflation rate. It is the weekly measure of wholesale price movement for the economy. Its effects are inefficient market, hoarding of Commodities, discourages investment & saving, higher income tax rates, increase imports and reduced exports.
