3. CAUSES OF INFLATION
A.
•
•
•
•
B.
•
•
•
•
Factors causing increase in demand for goods & services :
Increase in money supply
Increase in governmental & private expenditure
Decrease in tax rates
High growth rate of population
Factors causing decrease in supply of goods & services :
Scarcity of factor & non- factor inputs
Strikes & lockouts in business firms
Increase in exports
Illegal activities like black marketing & hoarding
4. CURRENT INFLATION RATE
In October of 2013, India’s annual headline inflation rose for the fifth
straight month to an eight-month high of 7 percent, mainly due to
higher prices of fuel and manufactured goods.
5. The index for food prices eased to an annual 18.19% slower
than the annual rise of 18.4% in September. On a monthly
basis, it declined 0.4 percent due to lower prices of ragi and
maize (5% each), tea (4%) and poultry chicken, fruits and
vegetables and fish-marine (3% each).
Energy costs were up 10.33% year-on-year, slightly up from
10% in the previous month. On a monthly basis, it increased
0.9%.
Prices of manufactured goods accelerated to 2.5%, up from 2%
in September. From September to October, it went up 0.4%.
Build up inflation rate in the financial year so far was 6%
compared to a build up rate of 4.66% in the corresponding
period of the previous year.
8. CHART – CURRENT CPI
INFLATION INDIA ( Yearly basis )
– Last 12 Months
The CPI inflation rates in the table are presented both on a monthly basis, compared
to the month before, as well as on a yearly basis, compared to the same month last
year.
9. Inflation (monthly basis)
inflation
Inflation (yearly basis)
inflation
october 2013 - september 2013
1.26 %
october 2013 - october 2012
11.06 %
september 2013 - august 2013
0.42 %
september 2013 - september
2012
10.70 %
august 2013 - july 2013
0.85 %
august 2013 - august 2012
10.75 %
july 2013 - june 2013
june 2013 - may 2013
may 2013 - april 2013
april 2013 - march 2013
1.73 %
1.32 %
0.88 %
0.89 %
july 2013 - july 2012
june 2013 - june 2012
may 2013 - may 2012
april 2013 - april 2012
10.85 %
11.06 %
10.68 %
10.24 %
march 2013 - february 2013
0.45 %
march 2013 - march 2012
11.44 %
february 2013 - january 2013
0.90 %
january 2013 - december 2012
0.91 %
december 2012 - november
2012
0.46 %
november 2012 - october 2012
0.46 %
february 2013 - february 2012 12.06 %
january 2013 - january 2012
december 2012 - december
2011
november 2012 - november
2011
11.62 %
11.17 %
9.55 %
11. HOW IS INFLATION
MEASURED?
Inflation is measured by a statistical tool known as index number.
In India, there are 5 major national indices for measuring
changes in the price levels - WPI (1) & CPIs (4)
i. WPI ( Whole Sale Price Index)
ii. CPI (Consumer Price Index)
iii. GDP Deflator
12.
13.
14. GENERAL MEASURES BY RBI
RBI measures inflation by Monetary policy.
Policy through which the central govt. & The central bank
of the country regulate the money supply in the economy
with a view to ‘correct inflationary or deflationary
situation’ in the economy & have monetary stability.
‘Monetary Policy’ is implemented through the use of
‘Monetary Instruments’ :i.
ii.
iii.
iv.
Bank Rate Policy (BRP)
Variable Cash Reserve Ratio (CRR)
Open Market Operations (OMO)
Statutory Liquidity Ratio (SLR)
15. CURRENT MEASURES
TAKEN BY RBI
Facing some of the fiercest price pressures
in Asia, the RBI lifted its policy repo rate
by 25 basis points (bps) to 7.75 percent, in
line with expectations in a Reuters poll.
With the rupee having stabilised after a
steep May-August slide, the RBI also
lowered its Marginal Standing Facility
(MSF) rate by a further 25 bps to 8.75
percent, as expected, which eases liquidity
in the banking system by lowering the cost
of borrowing for lenders.
16. CURRENT RATES
Bank Rate (BRP) : 8.75% (w.e.f. 29/10/2013)
Decreased from 9.00% which was continuing since 07/10/2013
Cash Reserve Ratio (CRR) : 4.00% (w.e.f. 09/02/2013)
Announced on 29/01/2013 - Decreased from 4.25% which was
continuing since 30/10/2012
Statutory Liquidity Ratio (SLR) : 23% (w.e.f. 11/08/2012)
Announced on 31/07/2012 - Decreased from 24% which was continuing
since 18/12/2010
17. Repo Rate under LAF : 7.75% (w.e.f. 29/10/2013)
Increased from 7.50% which was continuing since 20/09/2013
Reverse Repo Rate under LAF : 6.75% (w.e.f. 29/10/2013)
Increased from 6.50% which was continuing since 20/09/2013
Marginal Standing Facility (MSF) : 8.75% (w.e.f. 29/10/2013)
Decreased from 9.00% which was continuing since 07/10/2013
18.
19. RECENT NEWS ABOUT OMO
RBI has decided to purchase Rs 8000crs government bond
to keep the system adequately supplied with liquidity.
To strengthen currency rate.
The inflation rate in India was recorded at 7 percent in October of 2013. Inflation Rate in India is reported by the Ministry of Commerce and Industry, India. From 1969 until 2013, India Inflation Rate averaged 7.7 Percent reaching an all time high of 34.7 Percent in September of 1974 and a record low of -11.3 Percent in May of 1976. In India, the wholesale price index (WPI) is the main measure of inflation. The WPI measures the price of a representative basket of wholesale goods. In India, wholesale price index is divided into three groups: Primary Articles (20.1 percent of total weight), Fuel and Power (14.9 percent) and Manufactured Products (65 percent). Food Articles from the Primary Articles Group account for 14.3 percent of the total weight.
Current inflation India - this page features an overview of current inflation in India. Following inflation rates are available for India: Current inflation India (CPI India) – the inflation is based upon the Indian consumer price index. The index is a measure of the average price which consumers spend on a market-based "basket" of goods and services. Inflation based upon the consumer price index (CPI) is the main inflation indicator in most countries.