Chapter

Inflation In India

P. Mohanan Pillai, N. Shanta and K. Pushpangadan

in Growth, Development, and Diversity

Published in print June 2012 | ISBN: 9780198077992
Published online September 2012 | e-ISBN: 9780199081608 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780198077992.003.0004
Inflation In India

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In this study, the regional variation in inflation is examined using national income deflator, wholesale price index, and consumer price indices of agricultural labour, industrial workers, and urban non-manual workers. All partial cost of living indices show a decline in inflation after liberalization. The same trend is shown by the national income deflators. Among the three broad sectors of the economy, the decline is highest for the secondary sector but remains more or less the same for the primary and tertiary sectors. The σ-convergence of inflation among states for the entire period shows that there is convergence in all indicators except in the cost of living index of urban non-manual workers. Further statistical analysis using the dummy variable method does not support the convergence after liberalization. Finally, the aggregate index of all the partial indices using Borda Rank do not show any stable pattern for the states between the two periods, that is, post- and pre-liberalization period. Two notable extremes are West Bengal and Karnataka.

Keywords: inflation; partial cost of living index; liberalization; σ-convergence; Borda Rank; West Bengal; Karnataka

Chapter.  8190 words.  Illustrated.

Subjects: Economic Development and Growth

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