DEFINATION

In economics, Inflation is the rise in the

general level of prices of goods &services
in an economy over a period of time.

MEANING
Inflation means persistent increase in the level
of consumer prices or a persistent decline in
the purchasing power of money, caused by an
increase in available currency & credit beyond
the proportion of available goods & services.

TYPES OF INFLATION

C) Open & repressed inflation

OPEN INFLATION - Government takes no
steps to control price rise

REPRESSED INFLATION
price level check by
government

METHODS TO MEASURE
INFLATION
Consumer price index (CPI)

Wholesale price index (WPI)

 DEMAND SIDE FACTORS

CAUSING INFLATION:_

1. RISE IN PUBLIC EXPENDITURE:- expenditure incurred by

government
- aggregate demand is
greater than aggregate
supply
- INDIAS 48%

Deficit financing
- expenditure is more than income
- fiscal deficit in
2002-03 is
Rs145072crores
2007-08 is
Rs150948crores
2009- is
Rs161042crores

Continues-:

 SUPPLY SIDE FACTORS

CAUSING INFLATION
Industrial disputes
Natural calamities
Artificial scarcity
Increase in export
Global factors
(impact high oil price)
Fluctuating agricultural growth
Neglecting the production of consumer goods

RISING SUGAR PRICES NOT SO

SWEET FOR INDIA

This is how food prices have risen

since 2007 -:
This is how food prices have risen since 2007:
Food articles: 7.02% (in 2007) to 17.41% in October 2010.
Food products: 3.43% (in 2007) to 22.55% in October 2010.
Food commodities: 5.60% (in 2007) to 19.42% in October 2010.
Food grains: 6.27% (in 2007) to 17.89% in October 2010.
Cereals: 6.27% (in 2007) to 13.69% in October 2010.
Pulses: 2.14% (in 2007) to 45.62% in 2007 in October 2010.
Rice: 6.05% (in 2007) to 12.02% in October 2010.
Wheat: 6.77% (in 2007) to 14.86% in October 2010.
Dairy products: 6.08% (in 2007) to 12.87% in October 2010.
Eggs, fish and meat: 6.38%(in 2007)to 30.71% in October 2010.
Sugar: (-)14.69% (in 2007) to 58.94% in October 2010.

Item

1994-95
200
to 2004- 5
05

200
6

2007

20
08

200
9

2010
Janu
ary

Average
200609

1. All commodities

5.90

4.74

4.82

4.82

9.12

2.01

8.54

5.19

2. Non-food commodities

6.02

5.37

4.72

4.54

9.55

-1.76

4.53

4.27

3. Food articles

5.91

3.94

6.83

7.02

6.64

12.32

17.41

8.20

4. Food products

5.33

1.58

2.55

3.43

9.80

13.79

22.55

7.39

5. Food commodities (3 and

4)

5.64

2.97

5.09

5.60

7.87

12.90

19.42

7.86

Foodgrains

5.54

3.83

9.71

6.27

6.37

14.14

17.89

9.12

Cereals

5.57

3.68

6.63

6.97

7.20

12.96

13.69

8.44

Pulses

5.46

5.04

32.05

2.14

1.30

21.81

45.62

14.33

Rice

5.00

4.01

2.13

6.05

8.97

15.96

12.02

8.28

Wheat

5.93

1.08

12.99

6.77

5.06

6.83

14.86

7.91

Oilseeds

5.89

-6.11

-3.96

26.58

17.4
6

0.92

10.05

10.25

Fruits and vegetables

7.47

7.51

2.24

6.49

5.94

11.77

8.33

6.61

Dairy products

5.20

0.11

4.20

6.08

8.38

6.12

12.87

6.19

Milk group

5.57

0.73

4.48

8.17

7.87

8.93

13.99

7.36

Egg, fish and meat

6.46

9.46

6.72

6.38

3.75

14.44

30.71

7.82

Edible oils

4.85

-7.19

1.23

13.11

12.5

-6.59

-1.17

5.07

THANK YOU !