Inflation Rate

Assignment On Indias Trend of stinting appendage and purpose (Since the grade 1980 to2010) Submitted to DR. TAPAS KUMAR PAL Presented By * ARNABI BOSE (Roll- 1) * DIPA DAS (Roll- 10) * PURNAMRITA MALLICK (Roll- 3) * SWATI AGARWAL (Roll- 25) * TISTA BISWAS (Roll- 26) (MHROM foremost semester, Calcutta University) CHART SHOWING DATA OF NOMINAL & actual gross domestic product, outgrowth RATE, swelling & DEFLATION RATE AND EMPLOYMENT (PUBLIC & PRIVATE SECTOR) IN INDIA SINCE 1980 TO 2010 Year Nominalgross domestic product(Rs. ) Nominalgross domestic product Growth footstep(%) accreditedgross domestic product(Rs. RealGDP Growth Rate(%) Deflator lumpRate(%) human beings Sector(million) PrivateSector(million) Total handicraft(million) EmploymentRate(%) 1980-81 1368. 38 19. 51 7985. 06 7. 21 17. 14 11. 51 15. 48 7. 40 22. 88 2. 3 1981-82 1602. 13 17. 08 8434. 26 5. 63 18. 99 10. 79 16. 28 7. 53 23. 81 4. 06 1982-83 1789. 85 11. 72 8680. 91 2. 92 20. 62 8. 58 16. 75 7. 39 24. 14 1 . 38 1983-84 2093. 56 16. 97 9362. 69 7. 85 22. 36 8. 43 17. 22 7. 36 24. 58 1. 82 1984-85 2351. 13 12. 30 9733. 57 3. 96 24. 15 8. 00 17. 58 7. 43 25. 01 1. 4 1985-86 2627. 17 11. 74 10138. 66 4. 16 25. 91 7. 28 17. 68 7. 37 25. 05 1. 71 1986-87 2929. 24 11. 48 10576. 12 4. 31 27. 69 6. 86 18. 24 7. 39 25. 63 2. 31 1987-88 3320. 68 13. 36 10949. 92 3. 53 30. 32 9. 49 18. 32 7. 39 25. 71 0. 31 1988-89 3962. 95 19. 34 12062. 43 10. 16 32. 85 8. 34 18. 51 7. 45 25. 96 0. 97 1989-90 4565. 40 15. 20 12802. 28 6. 13 35. 66 8. 55 18. 77 7. 58 26. 35 1. 50 1990-91 5318. 13 16. 49 13478. 89 5. 29 39. 45 10. 62 19. 06 7. 68 26. 74 1. 48 1991-92 6135. 28 15. 37 13671. 71 1. 3 44. 87 13. 73 19. 21 7. 85 27. 06 1. 19 1992-93 7037. 23 14. 70 14405. 03 5. 36 48. 85 8. 87 19. 33 7. 85 27. 18 0. 44 1993-94 8197. 61 16. 49 15223. 43 5. 68 53. 85 10. 23 19. 45 7. 93 27. 38 0. 73 1994-95 9553. 85 16. 54 16196. 94 6. 39 58. 98 9. 52 19. 47 8. 06 27. 53 0. 54 1995-96 11185. 86 17. 08 17377. 40 7. 29 64. 37 9. 13 19. 43 8. 51 27. 94 1. 48 1996-97 13017. 88 16. 38 18763. 19 7. 97 69. 38 7. 78 19. 56 8. 69 28. 25 1. 10 1997-98 14476. 13 11. 20 19570. 31 4. 30 73. 97 6. 61 19. 42 8. 75 28. 17 0. 8 Year NominalGDP(billion) NominalGDP Growth Rate(%) RealGDP(billion) RealGDP Growth Rate(%) Deflator(%) InflationRate(%) Public Sector(million) PrivateSector(million) Total Employment(million) EmploymentRate(%) 1998-99 16687. 39 15. 28 20878. 27 6. 68 79. 93 8. 05 19. 41 8. 70 28. 11 0. 21 1999-00 18472. 73 10. 70 22462. 76 7. 59 82. 24 2. 89 19. 31 8. 65 27. 96 0. 53 2000-01 19919. 82 7. 83 23427. 74 4. 30 85. 03 3. 39 19. 14 8. 65 27. 79 0. 60 2001-02 21677. 45 8. 82 24720. 52 5. 52 87. 69 3. 12 18. 77 8. 43 27. 20 2. 12 2002-03 23382. 00 7. 86 25706. 0 3. 99 90. 95 3. 71 18. 58 8. 44 27. 02 0. 66 2003-04 26222. 16 12. 15 27778. 13 8. 06 94. 39 3. 78 18. 20 8. 25 26. 45 2. 10 2004-05 29714. 64 13. 32 29714. 64 6. 97 100 5. 94 18. 01 8. 45 26. 46 0. 03 2005-06 33905. 03 14. 10 32530. 73 9. 4 8 104. 32 4. 32 18. 19 8. 77 26. 96 1. 88 2006-07 39532. 76 16. 60 35643. 63 9. 57 110. 91 6. 31 18. 00 9. 24 27. 24 1. 03 2007-08 45820. 86 15. 91 38966. 36 9. 32 117. 59 6. 02 17. 67 9. 88 27. 55 1. 13 2008-09 53035. 67 15. 75 41586. 76 6. 72 127. 53 8. 45 17. 80 10. 38 28. 18 2. 28 2009-10 60914. 5 14. 86 45076. 37 8. 39 135. 13 5. 96 17. 86 10. 85 28. 71 1. 88 * INTRODUCTION * What is GDP? Gross domestic product (GDP) is the commercializeplace grade of wholly officially recognized final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a countrys archetype of living GDP = private consumption + gross investment + regime spending + (exports ? imports) * Nominal GDP is GDP evaluated at current market prices. Therefore, nominal GDP provide include all of the changes in market prices that have occurred during the current form due to splashiness or deflation. In order to abstract from changes in the overall pri ce level, another bankers bill of GDP called historical GDP is often used. Real GDP is GDP evaluated at the market prices of some radical form. For example, if 1990 were chosen as the base category, then sure GDP for 1995 is calculated by taking the quantities of all goods and services purchased in 1995 and multiplying them by their 1990 prices. * Inflation is defined as a rise in the overall price level, and deflation is defined as a fall in the overall price level. The ostentatiousness enjoin is maven of the most important sparing forces consistently weighing on the value of a nations currency. Low Inflation Causes Growth It is argued that low inflation empennage contribute to a higher aim of festering in the bulky term. This is because low inflation helps push stability, confidence, and security and therefore encourages investment. This investment helps promote long term economic harvesting. If an rescue has periods of high and volatile inflation sends, then tempos of economic harvest-tide tend to be lower. * spicy Inflation and Low Growth It is possible that an economy rotter birth low yield and high inflation this can occur if there is cost push inflation.Cost push inflation could be caused by cost increase oil prices. It increases costs for firms and reduces disposable income. Therefore, there is lower harvest-feast, whilst high inflation. * What is the affinity between inflation un workout and Real GDP? During peak periods of the business speech rhythm when the economy is experiencing rapid growth in substantive GDP, involution will increase as businesses readk workers to produce a higher output. If concrete GDP grows too quickly, however, it can cause price inflation as firms are forced to bid against one another or more and more scarce workers. In contrast during trough periods of the business cycle the economy is experiencing declines in trustworthy GDP, and mesh poses are low. This is classic Neo-Keynesian econo mic theory. * Workings 1. unhurriedness for Deflator (Nominal GDP/Real GDP)*100 2. Calculation for Inflation Rate (Current Years GDP Deflator precedent Years GDP Deflator) / Previous Years GDP Deflator* 100 3. Calculation for Growth Rate (Current Year Growth Rate-Previous Year Growth Rate)/Previous Year Growth Rate*100 4. Calculation for Employment Rate (Current Year Employment Rate-Previous Year Employment Rate)/Previous Year Employment Rate*100 We have calculated nominal GDP and Real GDP at the Factor Cost. * The modal(a) inflation respect with a 5- course of studys breakup is calculated below The fair(a) inflation come out of form 1980-85 is (11. 51+10. 79+8. 58+8. 53+8)/5=9. 48 The medium inflation rate of year 1985-90 is (7. 28+6. 86+9. 49+8. 34+8. 55)/5=8. 10 The ordinary inflation rate of year 1990-95 is (10. 62+13. 73+8. 87+10. 23+9. 52)/5=10. 59 The add up inflation rate of year 1995-2000 is (9. 13+7. 78+6. 61+8. 05+2. 89)/5=6. 89 The bonny inflation rate of y ear 2000-05 is 3. 39+3. 12+3. 71+3. 78+5. 94)/5=3. 98 The middling inflation rate of year 2005-10 is (4. 32+6. 31+6. 02+8. 45+5. 96)/5=6. 21 * The comely Employment Rate with a 5-years interval is calculated below The average employment rate of year 1980-85 (2. 3+4. 06+1. 38+1. 82+1. 74)/5=2. 26 The average employment rate of year 1985-90 (1. 71+2. 31+0. 31+0. 97+1. 50)/5=1. 36 The average employment rate of year 1990-95 (1. 48+1. 19+0. 44+0. 73+0. 54)/5=0. 87 The average employment rate of year 1995-2000 (1. 48+1. 10+0. 28+0. 21+0. 53)/5=0. 72 The average employment rate of year 2000-05 (0. 60+2. 12+0. 66+2. 10+0. 03)/5=1. 0 The average employment rate of year 2005-10 (1. 88+1. 03+1. 13+2. 28+1. 88)/5=1. 64 * The average Real GDP Growth rate with a 5-years interval is calculated below The average received GDP growth rate of year 1980-85 is (7. 21+5. 63+2. 92+7. 85+3. 96)/5=5. 51 The average real GDP growth rate of year 1985-90 is (4. 16+4. 31+3. 53+10. 16+6. 13)/5=5. 65 The aver age real GDP growth rate of year 1990-95 is (5. 29+1. 43+5. 36+5. 68+6. 39)/5=4. 83 The average real GDP growth rate of year 1995-2000 is (7. 29+7. 97+4. 30+6. 68+7. 59)/5=6. 76 The average real GDP growth rate of year 2000-05 is (4. 30+5. 52+3. 99+8. 06+6. 7)/5=5. 76 The average real GDP growth rate of year 2005-10 is (9. 48+9. 57+9. 32+6. 72+8. 39)/5=8. 69 * Conclusion As we can see the average real GDP growth rate from 1980-85 is 5. 51 and the average inflation rate of year 1980-85 is 9. 48 as well as the average real GDP growth rate of year 1985-90 is 5. 65 and the average inflation rate of year 1985-90 is 8. 10. So, it can be observe that, when the real GDP growth rates increase in the adjacent consecutive years, the inflation rate has been decreased. Again, average real GDP growth rate of year 1990-95 is 4. 83 and average inflation rate of year 1990-95 is 10. 9. Here with respect to the year 1985-90, the real GDP growth rate is decreasing and the inflation rate is increasing . Further, average real GDP growth rate of year 1995-2000 is 6. 76 and the average inflation rate of year 1995-2000 is 6. 89. Here again, with respect to the year 1990-95, the real GDP growth rate is increasing and the inflation rate is decreasing. Again, average real GDP growth rate of year 2000-05 is 5. 76 and average inflation rate of year 2000-05 is 3. 98. Here with respect to the year 1995-2000, the real GDP growth rate is decreasing and the inflation rate is excessively decreasing.And, average real GDP growth rate of year 2005-10 is 8. 69 and average inflation rate of year 2005-10 is 6. 21. Here with respect to the year 2000-05, the real GDP growth rate is increasing and the inflation rate is also increasing. THEREFORE, FROM THE ABOVE COMPARISONS, going away WITH THE MAJORITY, WE CAN CONCLUDE THAT IN INDIA, SINCE THE YEAR 1980-2010, REAL GDP increment RATE AND INFLATION RATE ARE mutually RELATED, AS FOR 3 CASES WE CAN SEE WHEN REAL GDP GROWTH RATES collect INCREASED, INFLA TION RATES HAVE DECREAS AND VICE VERSA Now, as per our assignment, we have to equality Indias Trend of Economic Growth with Employment (Since the year 1980 to2010). As we can see the average real GDP growth rate from 1980-85 is 5. 51 and the average employment rate of year 1980-85 is 2. 26 as well as the average real GDP growth rate of year 1985-90 is 5. 65 and the average employment rate of year 1985-90 is 1. 36. So, it can be observed that, when the real GDP growth rates increased in the next consecutive years, the employment rate has decreased. Again, average real GDP growth rate of year 1990-95 is 4. 83 and average employment rate of year 1990-95 is 0. 7. Here with respect to the year 1985-90, the real GDP growth rate is decreasing and the employment rate is also decreasing. Further, average real GDP growth rate of year 1995-2000 is 6. 76 and the average employment rate of year 1995-2000 is 0. 72. Here again, with respect to the year 1990-95, the real GDP growth rate is increasi ng and the employment rate is decreasing. Again, average real GDP growth rate of year 2000-05 is 5. 76 and average employment rate of year 2000-05 is 1. 10. Here with respect to the year 1995-2000, the real GDP growth rate is decreasing and the employment rate is increasing.And, average real GDP growth rate of year 2005-10 is 8. 69 and average employment rate of year 2005-10 is 1. 64. Here with respect to the year 2000-05, the real GDP growth rate is increasing and the employment rate is also increasing. THEREFORE, FROM THE ABOVE COMPARISONS, GOING WITH THE MAJORITY, WE CAN CONCLUDE THAT IN INDIA, SINCE THE YEAR 1980-2010, REAL GDP GROWTH RATE AND EMPLOYMENT RATE ARE INVERSELY RELATED, AS FOR 3 CASES WE CAN SEE WHEN REAL GDP GROWTH RATES HAVE INCREASED, EMPLOYMENT RATES HAVE DECREAS AND VICE VERSA