Inflation
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This document defines inflation and describes its types including creeping, walking, running, galloping, and hyper inflation. It lists causes of inflation such as demand pull, cost push, money supply expansion, population increase, and credit expansion. Methods to measure inflation and India's inflation rates are presented. Reasons for India's high inflation in the 1990s and post-1991 are discussed, including balance of payments changes, fiscal deficit, rupee depreciation, and global oil price increases. In conclusion, pre-reform inflation was due to domestic factors while post-reform inflation is more influenced by global scenarios.
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Inflation
- 1. Presented By: Aditi Thakur, Ishita Suman, Divesh Sahni, Dering Naben, Anmol Ratan
- 2. INFLATION LAYMEN Rise in Price TECHNICAL Inflation can be defined as the rise in overall price level in the economy i.e. rise in prices of all the goods and services
- 3. CREEPING Or MODERATE INFLATION WALKING INFLATION Types Of Inflation RUNNING INFLATION GALLOPING INFLATION HYPER INFLATION
- 4. Creeping Inflation The inflation of a nation increases gradually, but continually, over time Walking Inflation When the price rise is moderate. It is a warning signal for the government to control it before it turns into running inflation Running Inflation A rapid acceleration in the rate of rising prices more than 10% per annum is referred as Running Inflation
- 5. Galloping Inflation Hyper Inflation Prices rise by double or triple digit inflation rates like 400% or 999% per annum It is a stage of very high rate of inflation
- 6. Demand pull inflation (ex: petrol) Cost push inflation (ex: cement) Over- Expansion of Money Supply Causes Of Inflation Increase in Population Expansion of Bank Credit Black Money Poor Performance of Farm Sector
- 8. Dr Rangarajan Chairman, (PMEAC), on inflation in India: “In other countries, the growth rate is low, but at the same time inflation is also low. Whereas in our country, while growth is slowing, inflation remains at a high level.” Inflation in India - Overview Inflation Rate WPI (Feb 2013): 6.84% Inflation Rate CPI (Feb 2013) : 10.91 % All time high (Sept 1974): 34.7% Record low (May 1976) : -11.3
- 11. Reasons of Inflation Post 1991 Change In BOP Low Industrial Growth Sector Fiscal Deficit Rupee Depreciation Current Account Deficit Increase in oil prices twice during the period New Printing Of Money Reduced Interest Rates Increasing prices – particularly of Oilseeds and Edible oils Defence expenditures
- 15. Pre-reforms inflation was mostly because of the factors like drought, war, global inflation, rupee devaluation, etc. CONCLUSIONS In India, post reforms there has been inflation mostly because of global scenarios which maybe recession or rising crude oil prices that led to tremendous increase in the general price level. With the introduction of reforms like Globalization in India, the economy has been affected to a larger extent because of changes happening in the outside world in both the times whether good or bad.
- 16. THANK YOU