Post on 13-Jun-2015
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WHILE WRITING KEEP 4 W’s and 1 H IN YOUR MIND
WHAT WHEREWHO
WHICHHOW
An increase in the price you pay for goods.
OR
Price Inflation is when prices get higher or it takes more money to buy the same item.
•INCREASE IN PRICES OF DAILY USE COMMODITIES
•CUSTOM DUTIES ON IMPORTS ARE REDUCED
•CUSTOM DUTIES ON EXPORTS ARE INCREASED
According to economists current inflation rate is
8.98% recorded on 1stDecember, 08.
EFFECT ON SHARE MARKET…
•June 27:- India’s inflation rate jumped to 11.42 per cent in mid-June, its highest in more than 13 years, and analysts said the central bank could follow up two rate increases this month with more policy tightening as prices climb.
• The wholesale price index rose 11.42 per cent in the 12 months to June 14, up from 11.05 per cent a week earlier to its highest since annual numbers in the current series became available in April 1995.
An increase in the general level of prices implies a decrease in the purchasing power of the currency.
Uncertainty about future inflation may discourage investment and saving of the people in stock market.
•Rise in prices of food items
for example :- fruits,vegetables
•Rise in fuels for example LPG
Petrol
• Availability of loans at high rate of interest.
•Risk in investments
RISK IN INVESTMENT IN STOCK MARKET
DIRECT AND INDIRECT TAXATION DECRESE IN PURCHASING POWER OF COMMON PEOPLE
4
Steps Taken By The Government
INFLATION CAN’NOT BE AVOIDED BUT ITS EFFECT CAN BE LOWEREDBY FOLLOWING WAYS:-
PAYMENT OF TAXES
BY PURCHASING INDIAN GOODS
BY AVOIDING LARGE INVESTMENT IN SHARE
MARKET