India inflation rate 2006 had been lower towards the beginning of the year. The inflation rate in India in 2006 grew towards the middle of the year and rose again higher towards the end of the year.
In an economic context, the term 'inflation' pertains to the sustained increase in the prices of goods and services. The increase needs to be sustained and also significantly more than the mean prices, for the economic condition to be defined as inflation. It is always the aim of the Indian government to keep the rate of inflation in India below 4% because the more higher the rate of inflation, the more expensive life becomes for the people of the country.
The government of India, along with the Reserve bank of India monitors and controls the inflation rate in India. In February 2006, the rate of inflation in India stood at 4.02% but it has since then lowered due to the decrease in prices of groundnut seed, cotton seed, and raw cotton. In April, 2006 the inflation rate in India was pegged at 3.96%. However, in June, the rate of inflation in India in 2006 grew to 5.24%, which is the highest inflation rate in India in the last 13 months.
The rise in inflation has taken place due to the Indian government's decision to increase petrol and diesel prices. The depreciation of the rupee and the increase in global rates made the inflation rate in India 2006 rise. This rise in the India inflation rate 2006 led to the increase in interest rates, which in turn increased the cost of living for the citizens of the country.
In July, 2006 the India inflation rate stood at 5.21%. The rise in the inflation rates has taken place due to the increase of wholesale prices in food and energy. Due to the rise in the prices of manufactured and mineral products, the inflation rate in India stood at 5.45% in November, 2006.
India inflation rate 2006 was a function of several factors and led to an uncomfortable rise in the prices of commodities and services, which inconvenienced people from all walks of life. |