Geeta institute Of Management & Technology

Effect of inflation In

IndiaThakur Sandeep

MBA-1st Year

Inflation

The Dictionary meaning of the word inflation is expansion or an act of inflation. When the bladder of a football is filled with air, it is inflated. “Inflation is the stage of too much money chasing too few goods.”

Types of InflationOpen inflationSuppressed inflationWar time inflationPost war inflationCreeping inflationHyper inflationDemand pull inflationCost push inflation

AVERAGE ANNUAL GROWTH RATE OF PRICE

First plan 1951-56

2nd plan 1956-61

3rd plan 1961-66

4th plan 1969-74

5th plan 1974-78

6th plan 1980-85

7th plan 1985-90

8th plan 1992-97

9th plan 1997-02

10th plan 2002-07

11th plan 2010-11

-3.6 6.2 5.8 9.0 6.3 9.7 6.7 6.6 3.9 5.0 9.4

Effects of Inflation

Effect on economic developmentEffect on foreign InvestmentIncrease in cost of projectsEffect on agriculturistsEffect on EmploymentEffect on Balance PaymentsCorruption and moral degradation

Causes of InflationIncrease in money supplyDeficit FinancingBlack MoneyDevaluation of rupeesCredit expansionUrbanization Increase in PopulationIncrease in Exports

Measures to Control InflationDecrease in Public ExpenditureDelay in The Payment of Old DebtsIncrease in TaxesLess-deficit FinancingIncrease in ProductionProper Investment PolicyPrice ControlEncouragement To SavingProper Wage Policy

CONCLUSION Inflation is a sustained increase in the

general level of prices for goods and services. When inflation goes up, there is a decline in the purchasing power of money.

R.B.I play a very important role to control the inflation.