Inflation
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Inflation and it’s #effects#
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Transcript of Inflation
Inflation
and it’s
#effects#
On different
income groups…
The Flow Of Presentation
Introduction various income groups Factors affecting Inflation India’s scenario Effects on various income groups Conclusion- Remedies
Introduction
What is Inflation? World Bank Definition Calculation methods
CONSUMER PRICE INDEX WHOLESALE PRICE INDEX
≈COST PRICE INDEX≈ UPDATED COST CPI = X 100 BASE PRICE COST
≈WHOLESALE PRICE INDEX≈
WPI IN SAME MONTH OF PREVIOUS YEAR X 100 WPI IN MONTH OF CURRENT YEAR-‐WPI IN SAME MONTH OF PREVIOUS YEAR
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Various Income Groups (According To Major Occupa9ons)
(India)
6
investors
Fixed income groups
business community
Salary earners
government
workers
Wage earners
farmers
Factors Affecting Inflation Demand pull Cost push Exchange rate
Demand Pull Inflation:
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Cost Push Inflation:
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Scenario of India • BOOSTERS TO THE ECONOMY - 32000 Crs
• CUT IN EXCISE DUTY—2 %
• BUYING BACK OF GOVERNMENT SECURITIES
• INCREASE IN BORROWINGS FROM RBI
• PUMPING BAILOUTS
• RISE IN PRICES OF FOOD PRODUCTS
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Effects On Various Income Groups
Income tax slabs
-Below 2.5 lakhs -2.5 to 5 lakhs -5 to 10 lakhs -10 lakhs and above Urban Socio economic classification
Effects On Various Income Groups !
!Below 2.5 lakhs
Food sector~High
Manufacturing sector- Consumer goods:~High Capital goods:~Low Non- Manufacturing Sector- Infrastructure:~high Education:~High Energy: Petrol, Electricity, Oil~high
Effects On Various Income Groups !
!From 2.5 to 5 lacs
Food sector~High
Manufacturing sector- Consumer goods:~High Capital goods:~MODERATE Non- Manufacturing Sector- Infrastructure:~MODERATE Education:~High Energy: Petrol, Electricity, Oil~high
Effects On Various Income Groups !
!From 5 to 10 lacs
Food sector ~LOW
Manufacturing sector- Consumer goods:~LOW Capital goods:~HIGH Non- Manufacturing Sector- Infrastructure:~high Education:~LOW Energy: Petrol, Electricity, Oil~high
Effects On Various Income Groups !
!10 lacs and above!
Food sector~LOW
Manufacturing sector- Consumer goods:~LOW Capital goods:~moderate Non- Manufacturing Sector- Infrastructure:~moderate Education:~LOW Energy: Petrol, Electricity, Oil~LOW
Conclusion-Remidies
Fiscal Policies: • Reduced Government Expenditure • Increase in Taxes
Monetary Policies: • Bank Rate
• Cash Reserve Ratio
• Open Market Operations • Statutory Liquidity Ratio
webliography • www.crisil.com
• hDp://www.allbankingsolu9ons.com/DATA.htm
• hDp://ar9cles.economic9mes.india9mes.com/2012-‐07-‐13/news/32663798_1_india-‐growth-‐story-‐lower-‐growth-‐incomes-‐rise
• hDp://financeminister.in/latest-‐india-‐income-‐tax-‐slabs
• hDp://scn.sap.com/docs/DOC-‐56507
• hDp://www.fnbnews.com/ar9cle/detnews.asp?ar9cleid=34857&sec9onid=1
• hDp://www.livemint.com/Poli9cs/FD9G5mJJTe5v8RjrkluhwL/India-‐CPI-‐tops-‐es9mate-‐in-‐test-‐for-‐Rajan-‐as-‐industry-‐modera.html
• hDp://economic9mes.india9mes.com/news/economy/indicators/fall-‐in-‐rain-‐deficit-‐monsoon-‐situa9on-‐shows-‐significant-‐improvement/ar9cleshow/39907428.cms
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