Measurement Challenges of Inflation In India : An Analysis

Inflation is the continuous increase in the general price level of goods and services and leads to both short-term and long-term damages to any economy including India. It hardly needs any justification that inflation must be kept under control for sustained economic growth, promotion of investment and for prevention of deterioration in the living standards of masses in the country. Many economists consider the inflation as a permanent characteristic of Indian society. One of the fundamental objectives of macroeconomic policies in any economy including India is to sustain high economic growth together with low, one-digit inflation. The present paper seeks to examine the inflation scenario and its measurement challenges in Indian economy, which is one of the fast growing economies of the world. The study highlights the annual average rate of inflation during last ten years. Lastly, the study provides various measures to curb inflation from India with policy implications.