Inflation - A reality check

Inflation is a measure of how much the general level of prices for goods and services is rising over time. In other words, as inflation rises, the purchasing power of every unit of currency is decreasing. as a result. Some inflation is to be expected, though countries' central banks usually try to prevent excessive increases in the prices of goods and services.

Inflation in India dropped to negative market recently. For the first time in last 33 years the inflation rate turned to negative in India. Despite the negative inflation in India people have been feeling the pinch of the food prices.

In the era of NDA the high price of onion made the government to face sever criticism of the people. Now the situation is much more similar to that, the prices went up and budget of household is affected. In 2008, the inflation rose to double digit market and Reserve Bank of India( RBI) took many monetary and fiscal measures to check the inflation rate in India amid the global economic crisis. However the inflation has dropped to negative mark, but no relief to the people as the prices of goods and services are still high. The low production of some commodities in India for last eight months pushed the price up despite lower inflation rate. The RBI and government would chalk out measures to check the negative inflation which may lead to deflation state in the country.

Source: Alumni, Praxis Business School

Date: 21st Nov.,2009

For Further details of related courses and colleges please click below:

Relaated Courses and Colleges