INFLATION

In economics, Inflation is a rise in prices of goods and services in an economy over a period of time. Click to edit Master subtitle style

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(A). Monetary measures: Monetary measures relate to the control in the supply and circulation of money in the country. 1. Bank rate policy: In case of inflation, the bank rate is increased; the supply of money is controlled. 2. Open market operation: During inflation, the central bank sells govt. securities and price bonds in the open market in order to contract the supply of money. 3. Variable reserve ratio: In order to control inflation, the central bank increases the reservation. 4. Credit Rationing: When there is inflationary pressure, the state bank adopts the policy of credit rationing.

INFLATION CONTROL MEASURES

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(B). Fiscal Measures: Measures in connection with public borrowing, public expenditures and public revenues are called fiscal measures. 1. Public Borrowing: During inflation, increase the public borrowing, during deflation, decrease in public borrowing. 2. Public Revenues: In order to control inflation, the increase in public revenues by the Govt. 3. Public expenditures: Inflation is also controlled by decreasing the public expenditures by the Govt.

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(C). Realistic Measures: 1. Increase the supply of goods and services: When the supply of goods and services is increased,the prices will come down. 2. Population planning: Control on population by adopting different measures of familyplanningwill reduce the demand and finally prices will be controlled. 3. Price controlpolicy: The govt. should adopt strict price control policy against the 4/24/12 profiteers and hoarders.

A few weekly Inflation rates

Food Inflation Skyrockets To 18.32% For We Last Updated: 2011-01-06T14:12:35+05:30 Food Inflation in India has risen to touch 18.32% for the week ended December 25, the highest ever in recent months. The government on Thursday released the data on food inflation. The food inflation has increased for the fifth straight week. Last week, the annual food inflation was at ...

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Govt Committed to Take Steps to Control Inflation: Pranab

Attributing rising inflation partly to stimulus and increasing global commodity prices, Finance Minister Pranab Mukherjee said the government was committed to take all steps to moderate price rise. "We have to take all the necessary steps to keep inflation at moderate levels", he said while speaking at the 9th Pravasi Bhartiya Divas here. Mukherjee said the stimulus provided by the government to boost the economy in the aftermath of the global financial meltdown, among other things, was also responsible for rising prices. "In economy, every action has reaction. We have to face a situation where fiscal expansion led to rise in fiscal deficit ... That led to unstable price regime coupled with the global commodity price increase. (These) are the current challenges of the policy makers," he added. Led by spurt in prices of onion and other vegetables, the food inflation jumped to a year's high level of 18.32 per cent on December 25. The government had already taken tough action against hoarding to check rising prices, especially of onions. To help the economy combat the impact of global financial crisis in 2008, the Reserve Bank as well as the government had provided several stimulus packages. These measures mainly included increasing money supply, lowering tax rates and hiking public expenditure. While asking the Indian diaspora to invest and contribute to country's growth and prosperity, Mukherjee said the government was making efforts to achieve double-digit growth rate. "The reform process has continued at times gradually, with new initiatives on the anvil," he said, adding the aim is to achieve 10 per cent growth rate.

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"These policy measures are directed towards two major objectives. The first is to grow the economic pie in a sustained manner and boost GDP growth to a long-term path of over ten per cent per annum. The second is to take concrete steps in order to ensure equitable and inclusive distribution of the fruits from this growth process," he added. Mukherjee said prudent monetary and fiscal policies and a calibrated reform process helped the country limit the impact of the crisis in 2008.
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