Factors Responsible For High Inflation Rates in India

Cost of living has increased tremendously due to high inflation rates in India; the unprecedented rise in prices has made life difficult for a common Indian in a modern city with limited sources of income.

A country which believed in "Guest is God" and have had a great tradition of welcoming guests, now shuns guests, because they are no more comfortable in bearing the costs of their own daily expenses and they find it impossible when the additional responsibility of guests It is added. It seems that inflation is today also influencing the way Indian tradition and culture exist in their life.

How did it all happen, what are the factors which responsible for this new inflationary trend, is it a sign of a progressive nation or a nation doomed to fall. Economists blame fluctuation in demand and supply, but is this the only factor, are not there other factors responsible for this trend. Let's find out more about other causes of inflationary trends in India.

There are many perspective and prevailing views and thoughts on factors responsible for high inflation rates in India, which can be divided into different groups based on their profession and background like: –

  1. Economists
  2. Politicians
  3. Business Man
  4. Government Servant
  5. Astrologers
  6. Daily Wage Earners
  7. Labourers
  8. Traders in Commodity Market
  9. A Modern Housewife
  10. Villagers
  11. Farmers

Each of these groups has many reasons to believe in factors which they think are responsible for persistent high inflation rates in India, some of these professionals actually take care that the reason they mention should actually help their career perspective or maybe public image. So, here we should try to dig both contemporary views and some other potential factors which work in the background.

Common Factors that Influence Inflation Rate

1. Disposable Income: Earning more than what is actually required to meet basic needs, is said to impact inflationary trends in a country or region. India is today developing at a rapid speed, which means Indian people now have more jobs, good salaries and more income to dispose in the market.

2. Government Policies: Policies adopted by the government also influence inflation rates. In case of India they work at two levels, Central Governments and State Government and as such the actual impact of inflation will be slightly different in different parts of the country.

Global Factors 3.: the Today major economies of the globe not only the Influence of Government policies : other Countries but they 're impact Also there call is free . Of inflation , India is not untouched by vBulletinĀ® these external Factors.

4. Imports & Exports: Timely import of products and commodities that are in limited supply definitely helps in resisting rising inflation. On the other hand if we export such products and commodities which are likely to be demanded in future on the other hand can rise inflation.

5. Banking Policies: In India banks are governed by RBI, which decides how much money is available in the market. Banks increase or decrease their interest rates on the directives of RBI. Lower rates are said to increase inflation as more people use their money for shopping instead of keeping it in a bank as they do not find it attractive to keep that money in a bank, on the other hand people who do not have much money, take loans from Bank, in both conditions new increased demand rises inflation further.

6. Natural Factors: Nature still holds predominance in India, a major part of Indian agriculture is still rain fed, floods are also common in some regions, recently in 2012 below average rain forecast by Indian Meteorological departments stirred the government as well as the common man, somehow these forecasts turned out to be wrong.

7. Tradition & Culture: Indian markets are highly influenced by Indian tradition and culture, festival season is likely to increase demand and therefore inflation. India's rich tradition and culture, their habit of celebrating every occasion in social gathering, marriage season etc. are also seen to impact inflation in India.

8. Changing Lifestyle: Lifestyle also impacts rate of inflation, in India traditional lifestyle was based on the philosophy of simple living, high thinking. Today most Indians either do not agree with it or are not adhering to it. Most Indians are today attracted towards modern lifestyle, their rate of consumption has increased tremendously. Modern lifestyle is actually a self oriented lifestyle where people do not consider how it will impact society and nation, they are self-centered, if they get money they will use it for personal welfare.

The list above is just a brief list of probable reasons, there are many other causes that are impacting Indian markets and which can be controlled by Indian citizens, to apply brakes on the speed of inflation, as in India inflation is not creating financial difficulties but a large number of Indians who live below poverty line it poses a question of life and death.

Source by Yogesh Bailwal

Leave a Reply