Python Notes for mca i year students osmania university.docx
Trend of inflation from the year 1991 till
1. TREND OF INFLATION FROM
THE YEAR 1991 TILL DATE.
Submitted to : Submitted by :
Prof. Monika Dhinge Bharat Sharma(11)
Prachi Agrawal(55)
Pulkit Tiwari(64)
Ritesh Sood(69)
2. inflation
Inflation means a general and continual increase in
prices level in the economy, all the goods and
services.
India has been affected by this problem since 1950s
It came drastically forward with its ill effects post
Liberalization i.e. since 1991.
Ab initio there was fiscal deficit in 1991
Marked by deficits in Government finances and
devaluation of the Rupee,
A whopping inflation of 13.66 per cent took its toll on
the Indian economy.
3. Methods to Measure Inflation.
• Consumer Price Index (CPI)
• Wholesale Price Index (WPI)
4. Consumer Price Index (CPI)
• It is the measure of the changes in the price
level of predetermined consumer goods and
services
• CPI is very widely used to identify whether there is
inflation or deflation.
• two data are required for CPI
1) Price Data 2) Weighting Data
5. Wholesale price index (WPI)
• WPI is related to the change in prices of the
goods and services at wholesale level even
before entering into the retail level.
• The inflation rate figure is released in every 10
days which regulates stock and fixed price
markets
• WPI indirectly determines supply and demand
because it continuously monitors the change
in the price levels
6. Inflation Current CPI/WPI – Last Calculated CPI/WPI
= 100
Rate Last Calculated CPI/WPI
Inflation 150 - 140
= 100 = 7.12%
Rate 140
7. Causes/Reasons of Inflation
In 1990s
• The oil prices in the international market
increased.
• In 1991 imports were exceeding exports ie
trade deficit rose to 15600 Cores which led
India to borrow pecuniary resources from
International Monetary Fund(IMF).
• Prices of oil also doubled when Iraq invaded
Kuwait , which leads to rise in the oil prices in
the international market.
8. In 20th Century
• In the beginning of the period during 2002-03 ,India
witnessed uptrend in inflation as the prices of the oil was
increased doubly during that era(period).
• Due to drought conditions there was ill effect on
agricultural products which led to the increase in the
prices of edible oils and oil seeds
• Inflation was 3.3 % points up during the fiscal 2002-03and
as per the RBI report unlike preceding years ,this period
inflation was dominated by non-food items.
• The official expenditure on defense also gave up a
sudden rose to four times from Rs 16,347 cores to Rs
65,000 cores in the budget of 2002-03
9. Cont…
• Between the period 2005-2010 inflation showed the
real hike the wholesale price of commodities went up
to 38%. Few of the food items showed a drastic
increment in the prices like milk which showed 101%
which is the major cause of concern .
• In 2009-10 their was drought in the country due which
the prices of all the household, agricultural goods were
high causing food inflation
• In 2010-11 due to an increased demand of fruits and
vegetables , and also due to increase in the commodity
prices eg crude oil high inflation was caused.
10. OTHER FACTORS
• Growth in population
• Growth in private expenditure
• Increase in Export
• Money reduction in direct taxes
11. Impact On Indian Economy
• Indicator of liquidity.
• Deficit financing.
• Trade imbalance.
• Reduction of subsidies on agricultural products.
• Higher interest rates of bank.
• Demand of increment in wages by trade union.
