An Analysis of Indian Economic Inflation

Abstract

One of the things that slows down economic growth and living the most is inflation. In actuality, it has an impact on practically all economic activity, in addition to how ordinary and poor people consume. In India, prices have been rising steadily since 1947. It is clear that price swings foster an atmosphere of uncertainty that is unfavourable to the activities involved in development. In other words, inflation reduces the purchasing power of money by causing uncertainty in development efforts. At the same time, economic stability benefits from price stability. It's interesting to note that India's experiences with price instability contrast with the Keynesian theory, which holds that inflation only happens once full employment has been reached. However, this is not the case in India, where an increase in government spending is the primary driver of inflation. In order to better understand the inflationary tendency and rise of public spending in India over time, researchers try to do the following: Using the wholesale price index or the consumer price index, the price level fluctuation is quantified.