K J Somiaya Comprehensive College of education. PPT presentation of CAP

1. K J SOMAIYA COMPREHENSIVE COLLEGE OF EDUCATION, TRAINING &RESEARCH TOPIC : Inflation Trends & Its Effects. B.ED 2010 - 2011 By Silvia Fernandes Sub- Economics Roll No - 15 STD – 1X

2. INFLATION

4. Whole Price Index.

5. Consumer Price Index.

6. Trends in Inflation.

7. Impact of Inflation.

8. Effects of Inflation.CONTENT

12. The WPI number is a weekly measure of wholesale price movement for the economy.

13. Indian Government constructed its present WPI way back in 1993-94 (1993-94 series replacing 1981-82 bases) by making a basket of 435 commodities. The 100 point index is subdivided into three groups. WPI Indian Example

14. 1. Primary Articles (98 items) – 22.02%. Food articles, non-food articles, minerals. 2. Fuel, Power, Light and Lubricants (19 items) – 14.23%. 3. Manufactured Products (318 items)-63.75%. Food products Beverages, tobacco & tobacco products Textiles……..etc. Major Groups

15. WPI Monthly Inflation(Rate of inflation Y-Y in %)

17. CPI for Agricultural Labourers/rural labourers (CPI-AL/RL)

18. CPI for urban Non-Manual Employees (CPI-UNME)

20. Most developed countries use the CPI to calculate inflation as this actually means the increase in price that a consumer will ultimately have to pay for.

21. Presently 145 countries practice CPI compared to 27 practicing WPI.Measure of Inflation

22. The current CPI is 218.71

24. Gains & losses

25. Value of money

26. Resources

27. Unanticipated inflation leads to : Redistribution of income, borrower & lender Too much or too little lending or borrowing.

31. Hoarding of Commodities

32. Discourages investment & saving

33. Higher income tax rates.

34. Increase imports and reduced exports.Examples : Increase in the price of wheat,rice,sugar, CNG etc.

35. Evaluation What do you mean by Inflation? How is Inflation calculated? What do you mean by CPI? How does India calculate the Inflation rate? What do you mean by WPI? What are the effects of Inflation?

36. ANSWERS Inflation is general increase in price of goods and services. Inflation measured by WPI and CPI. It is the average price of consumer goods and services purchased by households. India uses the WPI to calculate the inflation rate. It is the weekly measure of wholesale price movement for the economy. Its effects are inefficient market, hoarding of Commodities, discourages investment & saving, higher income tax rates, increase imports and reduced exports.