India Inflation (Introduction):

Indian Economy has been experiencing an impressive growth in the recent years. The growth rate in output and employment has put some pressure on the level of inflation. The Whole Sell Prices Index (WPI) in the country as on 6th Jan 2007 has reached at 6.1 Percent. The present level of India inflation is considered as a challenge to the growing potentiality of the Indian Economy.

Most of the Countries over the world have stepped forward with tightening measures to check the rate of Indian inflation. The Reserve Bank of India being the country’s central bank has come forward with its policies to curb the rate of inflation.

The Inflation Rate in India in terms of Whole Sell Price Index is as follows:

Inflation Rate in India in terms of Whole Sell Price Index

Inflation Rate in India in terms of Whole Sell Price Index

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The Reserve Bank of India in its monetary policy has given top priority for maintaining the price stability and for sustaining the rate of growth of the economy. In the same direction the bank has raised the Cash Reserve Ratio in a continuous manner.

The Cash Reserve Ratio of the country over various years is as follows:

The above diagram shows a rising Cash Reserve Ratio of Reserve Bank Of India. The Cash Reserve Ratio as on 6th Jan 2007 has reached at 5.50 percent.

The rising prices of food products and manufacturing products put a pressure on the rate of Indian inflation.

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