inflation?

Question

sir i am K.R.Santhosh doing my 11 standard in vlmhss
coimbatore.sir how can the people of india can co-operate with Inflation sir and i think that the inflation
is not good for developing country like india.sir can you
suggest your views on this inflation.

Answer 1

it is said that in a growing economy [9% -10% growth rate] inflation is inevitable. inflation in a country like india with a large population and inequality in income level is worse than say an american economy or uk.
apart from removing supply constraints, govt should weed out hoarding. business people should not keep on incresing prices just because the market is able to bear it. plus there is no respite in oil price increase, it is infact contributing to this global trade binge. with credit absorption increasing may be the RBI should decrease SLR and make more funds available to the banking system to lend.

Answer 2

Inflation is controlled by inflations rates, which are determined by the central bank of the country, in your case State bank of India. Usually is the interest rate drops, inflation rises, and vice versa.

Answer 3

What is the reason behind inflation in India?

For the answer, Finance Minister P Chidambaram and the United Progressive Alliance government may read an advisory released by The Earth Policy Institute.

If prices of food and vegetables in India are soaring to new heights, blame it on the Americans.

According to the EPI statement, the diversion of US grain to produce ethanol to fuel cars has led to an increase in world food prices and the developing countries like India have already started paying for the rise in wheat prices.

Corn prices have doubled over the last year; wheat futures are trading at their highest level in 10 years and prices of rice are rising, EPI, a Washington-based environmental organisation, has said.

In India wheat prices are up 11 per cent and all of this is just the beginning. Higher grain prices mean higher food prices. In Mexico, the price of tortillas has risen by 60 per cent, driving thousands of angry Mexicans into the streets.

Food prices are rising worldwide. The US Department of Agriculture projects the wholesale price of chicken in 2007 will be 10 per cent higher than in 2006, prices of eggs will be up a whopping 21 per cent, and milk will be 14 per cent higher.

In China, pork prices are up 20 per cent above a year earlier and egg rates are up 16 per cent, the EPI said, adding that unlike in the past the food price rise is not going to be a temporary phenomenon.

In the past, food price rises have usually been weather-related and always temporary. This situation is different. As more and more fuel ethanol distilleries are built, world grain prices are moving up toward their oil-equivalent value in what appears to be the beginning of a long- term rise.

By 2008, close to one third of the US grain harvest will be going to ethanol, reducing the amount available both for internal use and for export.

Answer 4

though inflation is bad, in theory it could mean that employment rate is going up (Philip Curve) unless there is stagflation. If the employment rate is not going up yet prices are still going up, then yes it is bad and the government might want to do something to change the situation.

Answer 5

I'd prefer to be addressed as master