Posts Tagged ‘price rise’

INFLATION – “THE SILENT CREEPER” Part 2

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Hello Friends here we come up with an extension of our previous blog, INFLATION –  “THE SILENT CREEPER”.

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Inflation Silent Creeper Part 2

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In previous Blog we had touched upon the impacts of inflation on economy in current scenario and the reasons for the inflation.

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Now in this part we would look into the possible Measures to check inflation.

Measures to check inflation:


•  To give immediate relief from inflationary pressure, government is planning to check the supply deficiency.

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It has allowed importing sugar.

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It will import rice, as rice production is expected to drop in 2010.

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Import duties on oil seeds have been slashed.

•  Money supply should be checked, otherwise in the time of scarcity excess liquidity will accelerate inflation further.

•  Distribution process should be very fast and transparent.

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Currently we need a well managed and coordinated distribution of stocks through PDS (Public Distribution System), open market sales of public stocks etc.

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Hoarding should be avoided here and government should keep an eye on this.

•  This rising inflation has become a major threat for economy.

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The only key way to check the inflation is to bridge the gap between demand and supply, which may control the price rise.

•  Unfortunately, Indian agriculture is characterized by low input and low output systems.

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Hence we have to increase the productivity.

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For example: Yield of paddy in India is only 2.9 tonnes/hectare as compared to 7.5 tonnes/hectare in US.

•  Check the rising cost of cultivation.

Increasing land, labour, fertilizers and other inputs are discouraging farmers to produce more in absence of sufficient liquidity.

•  Apart from grain, government should also create buffer stocks or strategic reserve of oil seeds and other crop, so that it can release it at the time of crisis.

Next Blog we would try to know about the other concerns in Indian economy regarding the parameters to check inflation.

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Stay Tuned for more on this.

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Inflation Moves into Positive Territory after 13 Weeks !

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The inflation finally pulled back into the positive territory for the first time since 30th May 2009.

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It remained in negative zone for 13 consecutive weeks.

India’s inflation came in at 0.12 per cent in week ended 5th September 2009, as against -0.12 per cent in the previous week.

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Meanwhile, the rate was 12.42 per cent in the corresponding week of previous year.

During the week, price indices for primary articles, manufacturing products and fuel, power, light and lubricants reported rise.

The index for primary articles increased 1.3 per cent to 274.7 (provisional) from 271.2 (provisional) the week before.

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Similarly the index for manufactured products also went up 0.1 per cent to 208.1 (provisional) from 207.9 (provisional).

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The price index for fuel, power, light and lubricants also rose slightly to 343.4 (provisional) from 343.3 (provisional) for the previous week.
However, the price of naphtha declined 7 per cent.

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The rate turned negative for the week ended 6th June 2009, for the first time since the new wholesale price index (WPI) series started in 1995.

The inflation rate had also turned negative in 1977.

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Inflation touched a high of 12.91% for the week ended 2nd August 2008 and touched a low of -1.74% on 1st August 2009.

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