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Cause of Inflation in India is / are:
Deficit financing
Erratic agriculture growth
Inadequate rise in industrial production
All of the above
There is a quick increase in consumption and investment along with extremely confident firms. There is a sudden increase in exports due to huge under-valuation of the currency. There is a lot of government spending. The expectation that inflation will rise often leads to a rise in inflation. Workers and firms will increase their prices to 'catch up' to inflation. There is excessive monetary growth, when there is too much money in the system chasing too few goods. The 'price' of a good will thus increase. There is a rise in population.
By: Srishti Gupta ProfileResourcesReport error
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