Inflation
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Inflation remains a serious concern in India with the Consumer Price Index (CPI)-based inflation rising for the fifth consecutive month in February. At 10.9% from a year ago, consumer price inflation in India is the second highest among major economies—we still have some way to go before we can challenge Venezuela.
Prices in the food, beverages and tobacco segment went up 13.4% from a year ago, a 33-month high. Vegetable prices have shot up 21% year-on-year. Core CPI inflation (ex-food and fuel) is at 8.4% from a year ago, slightly higher than the 8.2% in January.
The continuous rise in food prices has led to CPI inflation, with its higher weight for food, showing a trend that diverges from wholesale price inflation, which eased to a three-year low of 6.6% in January.
Conclusion
“Inflation is like fever… monetary policy will help in cooling down temperature in the short-term. If inflation is structural, it is like a chronic disease, which can be tackled only through a careful balance of monetary policy and variety of fiscal and other policy measures,”
FINANCIALYEAR COST INFLATION INDEX
2012-13 852
2011-12 785
2010-2011 711
2009-2010 632
2008-2009 582
2007-2008 551
2006-2007 519
2005-2006 497
2004-2005 480
2003-2004 463
2002-2003 447
2001-2002 426
2000-2001 406
1999-2000 389
1998-1999 351
1997-1998 331
1996-1997 305
1995-1996 281
1994-1995 259
1993-1994 244
1992-1993 223
1991-1992 199
1990-1991 182
Summary
Inflation is the rapidly rising prices of goods and services caused to the increase in the supply money. Inflation arises when the demand for goods and services in an economy exceeds the supply of same. Inflation is a determinant in functioning of any economy. India is a country with a mixed economy model that comprises both capitalism and socialism hence the challenges faced are vital for its growth model. The recent rise in inflation has been found to consist of several political and economic crisis under
Inflation remains a serious concern in India with the Consumer Price Index (CPI)-based inflation rising for the fifth consecutive month in February. At 10.9% from a year ago, consumer price inflation in India is the second highest among major economies—we still have some way to go before we can challenge Venezuela.
Prices in the food, beverages and tobacco segment went up 13.4% from a year ago, a 33-month high. Vegetable prices have shot up 21% year-on-year. Core CPI inflation (ex-food and fuel) is at 8.4% from a year ago, slightly higher than the 8.2% in January.
The continuous rise in food prices has led to CPI inflation, with its higher weight for food, showing a trend that diverges from wholesale price inflation, which eased to a three-year low of 6.6% in January.
Conclusion
“Inflation is like fever… monetary policy will help in cooling down temperature in the short-term. If inflation is structural, it is like a chronic disease, which can be tackled only through a careful balance of monetary policy and variety of fiscal and other policy measures,”
FINANCIALYEAR COST INFLATION INDEX
2012-13 852
2011-12 785
2010-2011 711
2009-2010 632
2008-2009 582
2007-2008 551
2006-2007 519
2005-2006 497
2004-2005 480
2003-2004 463
2002-2003 447
2001-2002 426
2000-2001 406
1999-2000 389
1998-1999 351
1997-1998 331
1996-1997 305
1995-1996 281
1994-1995 259
1993-1994 244
1992-1993 223
1991-1992 199
1990-1991 182
Summary
Inflation is the rapidly rising prices of goods and services caused to the increase in the supply money. Inflation arises when the demand for goods and services in an economy exceeds the supply of same. Inflation is a determinant in functioning of any economy. India is a country with a mixed economy model that comprises both capitalism and socialism hence the challenges faced are vital for its growth model. The recent rise in inflation has been found to consist of several political and economic crisis under