Meaning : Inflation refers to a persistent upward movement in the general price level. It results in the decline of purchase power..
Types of Inflation
(a) Demand Pull Inflation : When demand for goods and services is more than their supply, their price rise. Such price rise is called demand pull inflation.
(b) Cost Push Inflation :Cost Push inflation refers to a situation where prices persistently rise because of growing factor costs.
(c) Stagflation: The combined form of demand pull inflation and cost push inflation. During the period 1990-94, high inflation occurred in India, in which the economy was stagnating.
Causes of Inflation in India:
- Increase in public expenditure
- Deficit Financing
- Erratic agricultural Growth
- Agricultural price policy of the government
- Inadequate rise in Industrial production
- Upward revision of administered price
Measures to Check Inflation
Inflation is a phenomenon where money income or purchasing power is rise faster than the real goods and services. Some steps to check Inflation are listed below:
- Monetary Measures
- Fiscal Measures
- Control over Investment
- Other Measures