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Inflation in India

Inflation in India

Presented By-Shubham Singhal

EC-09

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INFLATION “Inflation is nothing more than a sharp upward

rise in price level.” “Too much money chasing, too few goods.” “Inflation is a state in which the value of money

is falling i.e. price are rising.”

INFLATION in indiaBased on the wholesale price index, rose to 9.89 percent in February from 8.56 percent in the previous month, official data revealed Monday.The annual inflation rate was 3.5 percent in February 2009.

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KINDS OF INFLATION On the basis of rate of inflation On the basis of degree of control On the basis of causes Others

CAUSES OF INFLATION Demand pull inflation Cost push inflation

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2006-2007 2007-2008 2009-10 2010-11 (Feb.)

Inflation

7.8 12.0 11.2 9.89

Food inflation

10.3 17.6 12.86 8.8

Non-food inflation

6.2 6.8 11.9 9.6

INFLATION RATES

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EFFECTS OF INFLATION Make it difficult for companies to budget or plan

long-term. The future purchasing power of money discourages

investment and saving.

There can also be negative impacts to trade from an increased instability in currency exchange prices caused by unpredictable inflation.

Higher income tax rates. This will increase imports and reduce exports,

leading to a deficit in the balance of trade.For Example Increase in the price of wheat Increase in the price of world oil Increase in the price of rice Increase in the price of CNG

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Food Price Inflation

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Impact on Indian GDP Growth

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Increase In Price of Necessary Things

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Impact on Different Levels Persons

Inflation Kills Wages In Sectors

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HOW TO CONTROL INFLATION Monetary Measures

Fiscal Measures

Other Measures

Credit Control Demonetization of Currency Issue of New Currency

Reduction in Unnecessary Expenditure Increase in Taxes Increase in Savings Surplus Budgets Public Debt

To Increase Production Rational Wage Policy Price Control

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WHAT IS RBI DOING FOR IT ?

RBI is going to increase in interest rate of all types loan. RBI is also cut down the dept rate. RBI is also doing work for to control the credit. RBI hikes repo, reverse repo rates by 25 bps:The

Reserve Bank of India (RBI) today raised key policy rates by 25 basis points (bps) to mark a reversal of its easy monetary policy regime to tame inflation and anchor inflationary expectations.

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