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Macro economics Inflation

This document summarizes information about Group 14 which includes 5 members and their student IDs. It then defines inflation and discusses different types of inflation including demand-pull, cost-push, structural, and monetary inflation. Specific factors contributing to inflation in India are discussed like commodity prices, fuel prices, and economic structure changes. Historical inflation rates in India are provided and current inflation rates are given. Rising per capita income and food consumption, poor agricultural output, and spike in crude oil prices are said to influence food inflation in India. Benefits of organized retail in relation to lowering food prices are outlined.

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Macro-Economics•
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Group 14 Harendra Singh FT 12127 Revathi B FT 12151 Rituparna Kashyap FT 12152 Ronak Kumar Jain FT 12153 Tushar Arora FT 12168
Definition: Inflation is defined as a percentage change in price level for goods and services over a period of time. With the rise in inflation the purchasing power decreases.
 Demand Pull Inflation  Cost- Push Inflation  Structural Inflation  Monetary Inflation
 Inflation in India is due to combination of the factors – structural and less monetary.  Structural ◦ High commodity(Pulses, rice, milk, egg and fish etc)price, fuel price hike. ◦ Change in Economic Structure (change in structure of economies as happened in India from Agricultural Structure to Industrialization to Services • Monetary ◦ Government regulation to maintain economic growth during slow down.
 Highest Inflation rate 34.68 % in September of 1974  Lowest Inflation rate -11.31% in May 1976  Current Inflation rate in India is 7.78%. In this food price index rose to7.78 and fuel price index climbed to 12.84% (as on 30th June 2011)
 Rising per capita consumption of food  In 2002-03 the Per Capita Income in India was Rs 19040.  In2004-05 the Per Capita Income in India was Rs 23241.  In2009-10 the Per Capita Income in India was Rs 46492.  Food inflation rises due to poor agricultural output  Spike in the crude oil prices
 Organized retail can charge lower food prices because: ◦ (1) Economies of scale in procurement (mass buying from suppliers) ◦ (2) Economies of scale in handling and logistics such as via modernized distribution centers. ◦ (3) Build regional and global food procurement networks to reduce costs, de-seasonalise offerings, and increase product diversity.  The profit realization for farmers selling directly to organized retailers is about 60 per cent higher than that he would have received otherwise.  The ill-practice of auctioning at the mandis will stop.
Macro economics Inflation