Inflation

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  • Topic: Inflation, Consumer price index, Price index
  • Pages : 3 (526 words )
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  • Published : April 17, 2013
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INFLATION - ITS CAUSES and ITS EFFECTS ON VARIOUS SECTORS ON INDIA - September 2nd, 2010 WHAT IS INFLATION

Defination: 

Inflation is defined as the rate at which the general level of prices for goods and services is rising and subsequently purchasing power is falling

Measures of Inflation

Inflation is measured by calculating the percentage rate of change of a price index, which is called the inflation rate. 

Consumer price indices

Cost of living indices

Producer price indices

Commodity price Indices

Causes of Inflation in Current Scenario 

Global imbalance the cause for global liquidity 

The psychological dimension

Higher international farm prices impact Indian farm prices

Growth and forex flows 

Steps taken to control the current inflation 
* A well planned, reasonable and balanced intervention by the government  people have to understand the facts and logistics of price inflation.  * The public distribution system has to be geared up

INFLATION IN AIRLINE INDUSTRY
* One major issue is cost of Aviation Turbine Fuel 
* Companies prefer to ground flights 
* Prefer paying parking charges of Rs 50,000 per hr rather than keeping a flight in air which costs Rs 3,50,000.00 per hr * Job cuts in airline industries on a rise

INFLATION IN BANK 
* The RBI may go for further monetary tightening in the light of rising inflation  * Yields are rising, compelling the banks to raise interest rates, which will hamper their business growth  * Inflation concerns remain high with finance ministry officials indicating the rate could go up to 13 per cent in the near term

EFFECTS ON INFLATION ON AUTOMOBILE COMPANIES IN INDIA
* The automobile sector is also suffering because of soaring raw material prices * The automobile sector is also suffering because of soaring raw material prices * The automobile sector is also suffering because of soaring raw material prices * The two-wheeler sector is...
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