{"id":274680,"date":"2023-12-21T18:24:02","date_gmt":"2023-12-21T12:54:02","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=274680"},"modified":"2023-12-21T18:24:02","modified_gmt":"2023-12-21T12:54:02","slug":"findings-in-the-rbi-bulletin-on-inflation-what-causes-inflation-in-india-demand-or-supply-issues","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/findings-in-the-rbi-bulletin-on-inflation-what-causes-inflation-in-india-demand-or-supply-issues\/","title":{"rendered":"findings in the RBI bulletin on inflation-What causes inflation in India: Demand or supply issues?"},"content":{"rendered":"

Source<\/strong>: The post findings in the RBI bulletin on inflation has been created on the article \u201cWhat causes inflation in India: Demand or supply issues?\u201d<\/strong> published in \u201cThe Hindu\u201d<\/strong> on 21st December 2023.<\/p>\n

UPSC Syllabus Topic:<\/strong> GS paper 3- Indian economy- inflation<\/p>\n

News<\/strong>: The article discusses the December bulletin from the Reserve Bank of India, focusing on how India’s inflation is affected by supply and demand. It explains that during COVID-19, supply issues caused inflation, but after the Russia-Ukraine conflict, demand factors became more significant,<\/p>\n

What is inflation?<\/strong><\/h2>\n

Read here<\/a><\/p>\n

What are different types of inflation?<\/strong><\/h2>\n

Read here<\/a><\/p>\n

What are the major findings in the RBI December bulletin on inflation?<\/strong><\/h2>\n

Data Analysis<\/strong>:<\/strong> Using the Centre for Monitoring Indian Economy’s data, the bulletin categorizes inflation based on price and quantity shifts. If both rise, it’s demand-driven; if they move oppositely, it’s supply-driven.<\/p>\n

Cause of supply driven inflation:<\/strong> a) <\/strong>COVID-19 Restrictions-<\/strong> Lockdowns caused production declines, leading to supply shortages, b) <\/strong>Excess Rainfall<\/strong> (2019-2020)- Resulted in supply disruptions, especially for agricultural products, c) <\/strong>Global Events<\/strong>:<\/strong> The onset of the Russia-Ukraine<\/strong> conflict in 2022 exacerbated supply chain issues, impacting global commodity prices.<\/p>\n

Cause of demand driven inflation:<\/strong> a) <\/strong>Post-Lockdown Recovery<\/strong>– As COVID-19 restrictions lifted, there was a release of pent-up demand, outpacing supply recovery. b) Vaccine<\/strong> Distribution<\/strong>-Accelerated reopening of the economy, boosting consumer demand rapidly, c) <\/strong>Russia-Ukraine Conflict<\/strong>– Post-conflict,<\/strong> demand-side factors became more prominent, impacting prices.<\/p>\n

Overall Inflation Trends<\/strong>:<\/strong> From January 2019 to May 2023, supply factors contributed to about 55% of CPI headline inflation. In contrast, demand factors dropped to 27.1% in 2020 from 41.5% in 2019 but rose again post-COVID-19 and during the Russia-Ukraine conflict.<\/p>\n

Specific Categories<\/strong>: <\/strong>(from January 2019 to May 2023)<\/p>\n

Supply Constraints item: <\/strong>Vegetables, oils, fats, milk, eggs, pulses, sugar.<\/p>\n

Demand Influences item:<\/strong> Non-alcoholic beverages, personal care, health related goods.<\/p>\n

Question for practice:<\/strong><\/p>\n

Discuss the major findings in the RBI December bulletin on inflation and how supply and demand factors have affected India’s inflation trends from January 2019 to May 2023.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post findings in the RBI bulletin on inflation has been created on the article \u201cWhat causes inflation in India: Demand or supply issues?\u201d published in \u201cThe Hindu\u201d on 21st December 2023. UPSC Syllabus Topic: GS paper 3- Indian economy- inflation News: The article discusses the December bulletin from the Reserve Bank of India,… Continue reading findings in the RBI bulletin on inflation-What causes inflation in India: Demand or supply issues?<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,8184,10498],"class_list":["post-274680","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-economy","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":{"total":87,"cached_at":"","cached_date":1703201582},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/274680","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=274680"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/274680\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=274680"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=274680"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=274680"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}