1. TREND OF INFLATION FROM
THE YEAR 1991 TILL DATE.
Submitted to : Submitted by :
Prof. Monika Dhinge Bharat Sharma(11)
Prachi Agrawal(55)
Pulkit Tiwari(64)
Ritesh Sood(69)

2. inflation
 Inflation means a general and continual increase in
prices level in the economy, all the goods and
services.
 India has been affected by this problem since 1950s
 It came drastically forward with its ill effects post
Liberalization i.e. since 1991.
 Ab initio there was fiscal deficit in 1991
 Marked by deficits in Government finances and
devaluation of the Rupee,
 A whopping inflation of 13.66 per cent took its toll on
the Indian economy.

3. Methods to Measure Inflation.
• Consumer Price Index (CPI)
• Wholesale Price Index (WPI)

4. Consumer Price Index (CPI)
• It is the measure of the changes in the price
level of predetermined consumer goods and
services
• CPI is very widely used to identify whether there is
inflation or deflation.
• two data are required for CPI
1) Price Data 2) Weighting Data

5. Wholesale price index (WPI)
• WPI is related to the change in prices of the
goods and services at wholesale level even
before entering into the retail level.
• The inflation rate figure is released in every 10
days which regulates stock and fixed price
markets
• WPI indirectly determines supply and demand
because it continuously monitors the change
in the price levels

6. Inflation Current CPI/WPI – Last Calculated CPI/WPI
= 100
Rate Last Calculated CPI/WPI
Inflation 150 - 140
= 100 = 7.12%
Rate 140

7. Causes/Reasons of Inflation
In 1990s
• The oil prices in the international market
increased.
• In 1991 imports were exceeding exports ie
trade deficit rose to 15600 Cores which led
India to borrow pecuniary resources from
International Monetary Fund(IMF).
• Prices of oil also doubled when Iraq invaded
Kuwait , which leads to rise in the oil prices in
the international market.

8. In 20th Century
• In the beginning of the period during 2002-03 ,India
witnessed uptrend in inflation as the prices of the oil was
increased doubly during that era(period).
• Due to drought conditions there was ill effect on
agricultural products which led to the increase in the
prices of edible oils and oil seeds
• Inflation was 3.3 % points up during the fiscal 2002-03and
as per the RBI report unlike preceding years ,this period
inflation was dominated by non-food items.
• The official expenditure on defense also gave up a
sudden rose to four times from Rs 16,347 cores to Rs
65,000 cores in the budget of 2002-03

9. Cont…
• Between the period 2005-2010 inflation showed the
real hike the wholesale price of commodities went up
to 38%. Few of the food items showed a drastic
increment in the prices like milk which showed 101%
which is the major cause of concern .
• In 2009-10 their was drought in the country due which
the prices of all the household, agricultural goods were
high causing food inflation
• In 2010-11 due to an increased demand of fruits and
vegetables , and also due to increase in the commodity
prices eg crude oil high inflation was caused.

10. OTHER FACTORS
• Growth in population
• Growth in private expenditure
• Increase in Export
• Money reduction in direct taxes

11. Impact On Indian Economy
• Indicator of liquidity.
• Deficit financing.
• Trade imbalance.
• Reduction of subsidies on agricultural products.
• Higher interest rates of bank.
• Demand of increment in wages by trade union.

12. Co relation
• Relationship between US Dollar and Crude oil.
• Relationship between US Dollar and Gold.

13. Conclusion
• Gold – Crude oil Positive Relation
• Us dollar – Gold Negative Relation
• Us dollar- crude oil Negative Relation