From 1970 until 2010, the average inflation rate in India was 7.99 % reaching an historical high of 34.

68 % in September of 1974 and a record low of -9 percent (aprox.)in May of 1976. The Cathedral & John Connon School

India has already had 20 consecutive months of inflation in excess of 8%, from January 2010 to August 2011. . The previous inflationary episode in 2008 was more intense, with a higher peak. But it lasted for just seven consecutive months. The demand collapse after the economic crisis brought down inflation in the intervening 13 months, from December 2008 to December 2009. It is tempting to ask whether high inflation would have persisted in that period in case there had been no global economic crisis. If so, then India would have now had 40 months of high inflation in a row. The inflation expectations of households, which are surveyed by the Reserve Bank of India (RBI) every three months, are running ahead of actual inflation.

100 80 60 40 20 0

2004 pe

2008 pe

Jan-10 p

Food inflation has increased the greatest over the past period of years than the inflation of primary non-food articles, manufactured non-food products and fuel and power. Hence we will focus on impact food inflation in India . The graph explains food inflation>non food inflation. Its volatility is also greater than non food inflation.