Abstract

The case provides insights into the inflationary situation witnessed in 2006-07 in India. It examines the reasons behind the phenomenon of inflation and describes the various measures taken by the Indian government and the nation’s central bank to control it. It also discusses some of the criticisms against the steps taken by the Indian government.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the concept of inflation and its causes
• Critically analyze the various initiatives taken by the Indian government and the RBI to address inflation
• and Analyze the significance of Government and Central Bank in controlling inflation and the possible effect of their initiatives on the economy.

Keywords

Indian economy, Inflationary trends, Effect of High Growth on Inflation, Wholesale or Consumer Price Index, Foreign Exchange rate, Bank Rate, Cash Reserve Ratio, Monetary policy, Reserve Bank of India