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Inflation - Who is responsible?? (Page 2)

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Anuradha

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Anuradha

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Posted: 20 June 2008 at 11:39am | IP Logged
Originally posted by *Dakoo_Minzy*



If the price were not increased,many a crore's loss wud hv occured for Various companies.The govnt was compelled to bring in the hike.

Not to forget they didnt increase Kerosine,which is most imp for the villagers.



I knew someone would point this out... My question is - Should government consider the loss for the big shot companies or the common man??

Also remember that Kerosine is not the food.. People need to buy things to cook.. And because of petrol hike, the transportation charges are equally increasing... So, dont you think government should have taken some mid policy?? Smile

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SaaraCOMB

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Posted: 20 June 2008 at 1:28pm | IP Logged
Originally posted by Anuradha

I knew someone would point this out... My question is - Should government consider the loss for the big shot companies or the common man??

Also remember that Kerosine is not the food.. People need to buy things to cook.. And because of petrol hike, the transportation charges are equally increasing... So, dont you think government should have taken some mid policy?? Smile

It is always the common man who suffers, as all the burden of rising costs and prices is put on us only.

Governments can also help the big shot companies to some extent only. All the burden of their loss cannot be borne by the government.

At the moment the whole world is going through a recession. Its not only in India that inflation is rising so rapidly, the countries suffering from this also include Pakistan, Bangladesh, UK etc and most importantly US itself.

Above all money is loosing its value, purchasing power of people is falling.

There is not only one reason leading to these crisis a lot of factors need to be considered.

jagdu

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Posted: 20 June 2008 at 1:28pm | IP Logged

Anu,
It feels so nice that I can express my views somewhere, because on my own thread I just stick to the facts and let others vent.
Way back in december when the subject first popped up after almost 30 years, my theory was to do with the interest rates. A prediction of worldwide recession happened and interest rates were brought down all around the world. I questioned that and said there's inflation too, and the baloon will pop. Inflation will skyrocket, and the threat of recession will loom every quarter.
A recession happens when there are 2 successive quarters of negative growth. It is feared a lot more than inflation since it is a lot harder to control, and has not been declared so far.
There are way too many factors that have contributed to inflation. India is an economy that counts food costs and oil while calculating the inflation figure. That does not happen in all nations.
In december, it was predicted that the economy will grow at a reduced rate of around 7%, the last 3 years it was 9. Actual growth is if the inflation figure is reduced from that. An acceptable rate is 5.5% per the govt.
Govt. or it's policies are not responsible for inflation. All the taxes and subsidies on oil do not reflect it's actual price in India or China. Raj had a finger on the dollor. Yes, it's weakness has contributed to a lot of problems. A weak wall street does contribute to the falling dollor. Ektas said it very well. Rise in consumption spending is the best way to reduce the chances of a recession. Dakoo said it very well too. The price of oil uses the base price of the dollor in the 80's. In August of '07 the mideast countries decided to dump supporting the dollor and bring the price of oil to it's current value. And no Ananya, the problem will not be solved soon. The market does not correct itself so fast. Although I agree with you that there is only one way for inflation to go away, and that is for the market to display the correct numbers.

http://www.india-forums.com/forum_posts.asp?TID=941252&T PN=10



Edited by jagdu - 20 June 2008 at 5:22pm

Yosh

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Posted: 20 June 2008 at 2:09pm | IP Logged

Nina. LMAO. Just finished with Economics for the year, and you had to bring back the memories. (Tutor2u is an amazing website for any Economists in the making though btw LOL)

It's all down to basic demand and supply. Demand from booming economies eg China and India is increasing, world supply is falling short, this bids prices up. The government hasn't caused this, (inflation is rising all over the world, the UK's price level rose to 3.1% this week too) but yes they are responsible for keeping it low and stable and that's what they have to work on now. Tightening the monetary policy, dampening consumer demand would work as a temporary solution, but to tackle this in the long run, aggregate supply has to rise - implementation of supply side policies. Better education, training, tackling unemployment, increasing incentive to work, promoting competition and efficiency in product markets. (Atleast I think so)

Edit: Also in the UK, the monetary policy commitee have reluctantly had to cut interest rates despite inflationary pressures due to dampened consumer confidence caused by the credit crunch and recession worries, further increasing inflation. I see this has maybe a long term measure to ensure economic growth, and inflation can perhaps be seen as a short term cost?! Hmmm. Ermm



Edited by Yosh - 20 June 2008 at 2:20pm

jagdu

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Posted: 20 June 2008 at 2:26pm | IP Logged
Yash,
A big relief this week was at least UK did not raise the interest rates this week, given the turbulence in world economies. UK has been the leader in world headlines, whether it has been North sea, the underground tube, the Indian economy, or participation in the reform of the mideast economies.
Today an SFO supervisor tried to "generate revenue" on it's local trains by allowing alcoholic beverages. Something that Britain stopped allowing this week. Why did it fail in SFO? What revenues? One has to hire staff to maintain decorum.

x.sunayna.x

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Posted: 20 June 2008 at 9:15pm | IP Logged
Im new to this part forum but, Im doing a speech on this topic and Ive found that it is actually the economice slow down to blame. There is no way to stop the slow down but to ride it out till it finishes. It happens every 8 years or so and it is just part of the economic cycle. Inflation has also affected Zimbabwe tomatoes there cost 20 million dollars.
Asia is actually doing the best economy wise at the moment but the inflation is just a sign that the world may be going into a Global recession and we will be told on the 27th of June wether it is or not ( depending on if the Quarter 2 shows negative or positive)
?xXx?
Sunayna

missmasakalli

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Posted: 20 June 2008 at 11:49pm | IP Logged
The main reason for inflation is rising crude oil prices at global level..This automatically leads to inflation thru higher production & wage costs.So the heavy fuel prices are contributing hugegly for inflation.
Crude prices are rising due to
^Speculation in oil futures market.
^Widening demand supply gap attributed to OPEC not raising production to meet rising demand esp from growing economies like china & India.
^Geo political tensions.
^Falling dollar due to slowdown in US economy & many other reasons....
At present oil prices are at $135 per barrel.And it is expected that prices will rise to $200 per barrel in near future...which will lead to more inflation.Our govt is trying hard to curb it but its not an easy task..


x.sunayna.x

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x.sunayna.x

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Posted: 21 June 2008 at 12:53am | IP Logged

Originally posted by jinniezz

The main reason for inflation is rising crude oil prices at global level..This automatically leads to inflation thru higher production & wage costs.So the heavy fuel prices are contributing hugegly for inflation.
Crude prices are rising due to
^Speculation in oil futures market.
^Widening demand supply gap attributed to OPEC not raising production to meet rising demand esp from growing economies like china & India.
^Geo political tensions.
^Falling dollar due to slowdown in US economy & many other reasons....
At present oil prices are at $135 per barrel.And it is expected that prices will rise to $200 per barrel in near future...which will lead to more inflation.Our govt is trying hard to curb it but its not an easy task..


I Disagree with you. mainly because oil prices cannot change the price we pay for vegetables. oil just increases petrol costs, not inflation.

?xXx?

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