Volume : IV, Issue : IX, September - 2014

A Review on Inflation in India–Causes, its Impacts, Trends and Measures to Control

Dr. G. L. Parvathamma

Abstract :

Growth with stability is essential condition for attaining sustainable economic development. Fluctuations in prices create an atmosphere of uncertainty which is not conducive to development activity. Inflations mean paying more for goods than paying earlier. Not only essential goods see a hike, non–essential items like cigarettes etc would also cost more. The price of everything goes up over time and this phenomenon is called inflation. The rate at which the prices of everything go up is called the "rate of inflation". For example, if the price of something is Rs.50 this year and next year the price becomes approximately Rs.54 then the rate of inflation is 4%. If the price of something is Rs.80 then after a year with a rate of inflation of 4% the price go up to (80 x 1.04) = 83.2.The present article made an attempt to assess the issues relating to inflation such as relationship between Money supply and inflation, impact of inflation in general and particularly on common man, Measures of Inflation, Food inflation. Trends in inflation (CPI) over a period of time and also on current status of inflation in India. The study examines that increasing price level could leads to fall in Purchasing power of the rupee, commuting budget has increased for most of the middle class. Fixed income groups will be hit the hardest because their salaries will not be revised to include the cost of living even as prices of items soar. However, at present WPI inflation rose to a five–month high of 6.01 per cent in May from 5.20 per cent in the previous month mainly because of higher prices of food items. Inflation is affected badly the life of middle and poor class. Finally it concludes that, controlling inflation is needs tremendous, effective and long term policies of the government. Inflation has been properly been curbed or averted the world economy with experience of new face on employment policies and have a new eath on the standard of living around the globe.

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

Dr. G.l.Parvathamma A Review on Inflation in India-Causes, its Impacts, Trends and Measures to Control Indian Journal of Applied Research, Vol.4, Issue.9 September 2014

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