INFLATION IN INDIA: A LITERATURE REVIEW

Abstract:

                                  Rising inflation is a concern for all the countries. Since independence India has been facing inflationary pressure. Several factors have worked behind inflation in India. Both structural and monetary causes have contributed to the inflation in India. The paper is an attempt to review the available literature on inflation in India. It studies different aspects of inflation in India in a structured manner. The paper reviews the causes of persistent inflation in India, how core inflation can contribute in the determination of headline inflation in India and the trends of inflation in India. The study explores the role of policy regimes in controlling inflation. Based on recommendations of various economists it is propounded that 2 per cent to 4 per cent inflation may be considered good for any economy. As on one side it reduces the risk of hitting zero bound and on other side it ensures the growth of the economy. Till date in India inflation targeting has never been adopted rigorously but now central bank has taken a target to reduce the inflation in India and policies are being designed to eradicate inflation from Indian economy.

Key Words: Inflation, Core Inflation, Wholesale Price Index (WPI), Consumer Price Index(CPI), Headline Inflation.