This is an increase in the price of a basket of goods and services that is representative of the economy as a whole. Another definition of inflation is that it is an upward movement in the average level of prices. Its opposite is deflation, a similar movement in the opposite direction. The boundary between inflation and deflation is price stability. Because inflation is a rise in the level of prices, it is intrinsically linked to money, which may explain the frequently quoted, “Inflation is too many rupees chasing too few goods.
What is WPI?
The wholesale price index (WPI) is the most widely used price index in India. It is the only general index aimed at capturing week-to-week price behavior of commodities flowing into the wholesale trade. WPI tracks price movements in 435 items, and it attaches a value of 22.02 % for primary articles, 14.23 % for fuel, power, light and lubricants, and a dominant 63.75 % for manufactured products. The index is generally taken as the indicator of the rate of inflation in the economy. The government and the RBI formulate their fiscal and monetary policies on that basis.
What is CPI?
Unlike in many other countries, India does not have a single consumer price index (CPI), which can then be used to measure inflation (more accurately, many say, than the WPI). What we have are four indices that measure the price behavior of commodities as relevant to four specific segments of population. Of the four, the CPI for industrial workers (CPI-IW) is the most used indicator to determine the price situation facing common people. This is also used to determine the dearness allowance of employees in both public and private sectors.
As their names suggest, the CPI pertains to a set of items that a consumer consumes while the WPI is a basket particular to the wholesale market. Therefore, if the inflation for a particular week is, say, 10 per cent, it means the index is 10 per cent higher than it was the same week the previous year. Then there is core-inflation, which means the inflation rate without taking into account food and fuel. Some say both need to be taken out because of their volatility, while some argue that both items cannot be taken out because a consumer does pay for the rise in their prices.
The index always has a base year. If a particular item has a higher weight and its price rises, it will have a greater effect on the inflation rate. At the end of the day it depends on how much weight a particular item is assigned. Most countries use a consumer price index (CPI) while India has a wholesale price index (WPI).
Inflation is always caused because of too much money in the system. In other words, inflation in a country is always caused because the supply of money is much greater than the demand for it.
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Article Source: http://EzineArticles.com/?expert=Mahesh_Mohan
Monday, September 24, 2007
Those Struggling With Debt 'Should Consult Professionals'
Moves to improve financial education and help more low-income consumers access competitively-priced loans and other forms of borrowing have been welcomed by one industry body.
According to R3 - the Association of Business Recovery Professionals, the trade body representing insolvency practitioners, the recently announced government scheme could help borrowers avoid unscrupulous loan sharks who charge borrowers high rates of interest. As a result of being guided away from such providers it is possible that consumers could adopt a more responsible attitude towards handling their money and be able to successfully search for a low-cost loan.
Nick O’Reilly, vice-president for R3, claimed that those Britons who are struggling to handle various demands on their spending such as mortgages, utility bills and secured loans, should avoid loan sharks and instead seek advice on their debts from reputable professionals.
He said: “Loan sharks take advantage of those who are at their most vulnerable. In most cases, when an individual approaches a loan shark, they see it as their only way out of trouble, but unfortunately dealing with loan sharks can only lead to more problems. The advice from the professionals is to consult an expert as soon as you see problems arising. They can advise on the best course of action, without resorting to illegal loans sharks.”
In addition, the association pointed to statistics from its most recent debt index, carried out in August, which showed that only just over a third (38 per cent) of people who claim that their finances are causing them “great difficulties” have looked to get professional advice. Meanwhile, 12 per cent of those concerned about their money management have gone on to borrow cash again via loans, which in “many cases” has seen them resort to loan sharks.
Findings from the R3 index also indicated that one in five see their debts as currently being “out of control”. As a result, 19 per cent of those struggling to handle their finances have taken out a debt consolidation loan, with 28 per cent selling items as a means of raising extra cash. People on lower incomes are revealed to have higher proportions of debt as those earning 21,540 pounds are some 8,831 pounds in the red via non-mortgage borrowing. This compares to the 8,995 pounds of arrears consumers on an annual salary of 37,480 pounds are on.
Overall, the West Midlands has the highest proportion of overall debt, in comparison to Scotland which has the least. Women are also suggested to be the most astute in handling their money as despite earning less than their male counterparts they have lower levels of both mortgage and non-mortgage debt.
Earlier this month, the Association of British Credit Unions revealed it is set to discuss the country’s money management difficulties being held at all three of the major political party conferences. The meetings are to discuss how to help financially-excluded members of society access competitively-priced lending options such as low-rate loans. In addition, the gatherings are to discuss the provision of borrowing, for instance of adverse credit loans, for the rising numbers who find themselves with a damaged financial history.
Mark Dawson writes for the Loan Arrangers. Where visitors can compare cheap loans online, and apply for debt consolidation loans. To read more articles from Mark go to http://news.loan-arrangers.co.uk
Article Source: http://EzineArticles.com/?expert=Mark_Dawson
According to R3 - the Association of Business Recovery Professionals, the trade body representing insolvency practitioners, the recently announced government scheme could help borrowers avoid unscrupulous loan sharks who charge borrowers high rates of interest. As a result of being guided away from such providers it is possible that consumers could adopt a more responsible attitude towards handling their money and be able to successfully search for a low-cost loan.
Nick O’Reilly, vice-president for R3, claimed that those Britons who are struggling to handle various demands on their spending such as mortgages, utility bills and secured loans, should avoid loan sharks and instead seek advice on their debts from reputable professionals.
He said: “Loan sharks take advantage of those who are at their most vulnerable. In most cases, when an individual approaches a loan shark, they see it as their only way out of trouble, but unfortunately dealing with loan sharks can only lead to more problems. The advice from the professionals is to consult an expert as soon as you see problems arising. They can advise on the best course of action, without resorting to illegal loans sharks.”
In addition, the association pointed to statistics from its most recent debt index, carried out in August, which showed that only just over a third (38 per cent) of people who claim that their finances are causing them “great difficulties” have looked to get professional advice. Meanwhile, 12 per cent of those concerned about their money management have gone on to borrow cash again via loans, which in “many cases” has seen them resort to loan sharks.
Findings from the R3 index also indicated that one in five see their debts as currently being “out of control”. As a result, 19 per cent of those struggling to handle their finances have taken out a debt consolidation loan, with 28 per cent selling items as a means of raising extra cash. People on lower incomes are revealed to have higher proportions of debt as those earning 21,540 pounds are some 8,831 pounds in the red via non-mortgage borrowing. This compares to the 8,995 pounds of arrears consumers on an annual salary of 37,480 pounds are on.
Overall, the West Midlands has the highest proportion of overall debt, in comparison to Scotland which has the least. Women are also suggested to be the most astute in handling their money as despite earning less than their male counterparts they have lower levels of both mortgage and non-mortgage debt.
Earlier this month, the Association of British Credit Unions revealed it is set to discuss the country’s money management difficulties being held at all three of the major political party conferences. The meetings are to discuss how to help financially-excluded members of society access competitively-priced lending options such as low-rate loans. In addition, the gatherings are to discuss the provision of borrowing, for instance of adverse credit loans, for the rising numbers who find themselves with a damaged financial history.
Mark Dawson writes for the Loan Arrangers. Where visitors can compare cheap loans online, and apply for debt consolidation loans. To read more articles from Mark go to http://news.loan-arrangers.co.uk
Article Source: http://EzineArticles.com/?expert=Mark_Dawson
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