Presented By: Aditi Thakur, Ishita Suman, Divesh Sahni,

Dering Naben, Anmol Ratan

LAYMEN Rise in Price

TECHNICALInflation can be defined as the rise in overall price level in the economy i.e. rise in prices of all the goods and services

INFLATION

Types Of Inflation

CREEPING Or MODERATE INFLATION

WALKING INFLATION

RUNNING INFLATION

GALLOPING INFLATION

HYPER INFLATION

The inflation of a nation increases gradually, but continually, over timeCreeping Inflation

Walking InflationWhen the price rise is moderate. It is a warning signal for the government to control it before it turns into running inflation

A rapid acceleration in the rate of rising prices more than 10% per annum is referred as Running Inflation

Running Inflation

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

Demand pull inflation (ex: petrol)

Cost push inflation (ex: cement)

Over- Expansion of Money Supply

Increase in Population

Expansion of Bank Credit

Black Money

Poor Performance of Farm Sector

Causes Of Inflation

WPI

CPI

GNP DEFLATOR

Methods To

Measure Inflation

Inflation in India - Overview

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 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

REASONS OF INFLATION IN

1990S

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

CONCLUSIONS

Pre-reforms inflation was mostly because of the factors like drought, war, global inflation, rupee devaluation, etc.

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.

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