Inflation in India

• Increase in production and labor costs have a direct impact on the price of the production resulting in inflation.
• When countries borrow money. They have a burden of interest on them. This burden results in inflation.
• High taxes on consumer product can also lead to inflation.
• Some of the people are cause of inflation by stocking the material when its demand is more in market.
• Demands pull inflation, cost push inflation where in non-availability of a material would lead to increase in price that causes inflation.
• Inflation produce imbalance between supply and demand within, it goes out of control. For Example: - The mortgage crises of 2007 in USA.
• Could be best illustrating the ill effect of inflation. Increasing high housing price from 2002 onwards give dramatic decrease in Demand.
• Inflation create major problem in economy. This effect on the poor people which have low income & increase in poverty.
• Uncertainty in economy would force people to withdraw the money from bank & invest this money on glad land etc.