Inflation Pulses

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INFLATION ONPULSES


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CONCEPT OFINFLATIONInflation is a global phenomenon in a present time. Itis one of the most crucial macroeconomic problem formany countries in the world. Inflation is an increase in

the overall price level. It happens when many pricesincrease simultaneously.

KEYNES-Inflation as a phenomenon of full employment.

CROWTHER-Inflation is a state in which the value ofmoney is falling and prices are rising.


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TPES OF INFLATION

On the basis of speed.

On the basis of cause.

On the basis of nature.

On the basis of coverage.

On the basis of employment.


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ON THE BASIS OF SPEEDCreeping inflation:When there is price

rise by not more than 3% per annum, thesituation is called creping inflation.

Walking inflation:When creepinginflation continues over a decade and pricerise from 3-4% per annum, it is calledwalking inflation.

Running inflation:It would record a

100% rise in general price level over aperiod of 10 years.

Hyper inflation:It is an indicator ofserious problem. In it,price rise every

moment and every second.


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ON THE BASIS OFNATUREOpen inflation: It takes place when

increase in price due to lack of any controlon expenditure when income increases. It

follows the symptom of prosperity.

Supressed inflation: It is the one in whichgovernment attempts to supress theinflationary pressure by controlling prices,exchange rates, creation of banks, etc.


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INTRODUCTION TO PULSES The name pulse is derived from the Latin puls

meaning thick soup or potage. Many early civilizations developed around diets of

pulses for protein, combined with a cereal crop toprovide energy. Beans and corn are the example

from the Americas, while pita and humus (chickpeabased) are a Middle Eastern illustration.

Pulses are unique among grain crops in their abilityto partner with certain soil bacteria to take

nitrogen, an essential plant nutrient, from the airand turn it in to a form that can be used by plants.

Pulses are the edible seeds of legumes, like lentils,beans, peas and chickpeas. Each of these pulse crops

come in a wide range of colors and sizes.


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OBJECTIVES OF THESTUDYTo compute the inflation rates of pulses.

To identify the main causes of inflation in

pulses.To study the effects of inflation.

To identify the measures of inflationcontrol.

To analyze the trends of price rise ofpulses.


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PROBLEM OF THESTUDYPulses are the major constituent of Nepalesediet and thus the rise and fall in the price ofpulses greatly affects the household economy.There are different reasons leading to the

inflationary rises in price of pulses. Finding outprice rises in pulses by the computation ofinflation rates may be an effective way totrace out the trends of theirconsumption.Therefore , the study is done in

order to extract adequate knowledge on therate of inflation of pulses in the past fewyears along with the causes and measures tocontrol them.


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LIMITATIONS OF THESTUDYHigh frequency data (e.g. monthly,

quarterly etc.) are not used in this studybecause of unavailability of some of the

data. Annual data is used.

Since only the case of pulses isconsidered, a valid generalization of theconclusions drawn cannot be expected.


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METHODOLOGY OF THESTUDYData source.

Data presentation.Data analysis.


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DATA SOURCE

The report is all in all based on the secondarydata obtained from the economic bulletin of NRB.The sources of the secondary data can be listedas:

Nepal Rastra Bank Central bureau of statistics

Ministry of Agriculture

Research Journals

National dailies Other related publications


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DATA PRESENTAION

YEAR CPI (CONSUMER PRICE INDEX) INFLATION RATE(R)

1995/1996 100 -1996/1997 103.3 3.31997/1998 100.8 -2.421998/1999 117.8 16.871999/2000 114.9 -2.462000/2001 120.3 4.692001/2002 117.1 -2.662002/2003 115.4 -1.452003/2004 114.2 -1.042004/2005 119.6 4.732005/2006 145.6 21.742006/2007 171.9 18.062007/2008 186.1 8.262008/2009 230.2 23.69


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BAR GRAPH

-50

0

50

100

150

200

250

1996

/199

7

1998

/199

9

2000

/200

1

2002

/200

3

2004

/200

5

2006

/200

7

2008

/200

9

CPI (CONSUMERPRICE INDEX) 100

INFLATION RATE -


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FORMULAE FOR

INFLATIONCOMPUTATION


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COMPARATIVE DATA

ANALYSIS

The inflation rate of pulses in Nepal during the last 15years is in the state of fluctuation as we can see that in1996/1997, the inflation rate is3.3% and in 1997/1998, it is2.42%.

Similarly in 1998/1999 and in 1999/2000, the inflationrates of pulses in Nepal are 16.87% and -2.46%respectively.

Similarly, the inflation rates during the second 5 years i. e2000/2001, 2001/2002, 2002/2003, 2003/2004 and2004/2005 are 4.695, -2.665,1.45%, -1.045 and 4.73respectively.

The inflation rate of pulses in Nepal in 2005/2006,

2006/2007, 2007/2008 and 2008/2009 are 21.745,18.06%, 8.265 and 23.69% respectively.


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CAUSES OF INFLATION ONPULSESFarmers turning away.

Lack of marketing interventionmeasures.

Historical reasons.

Too many intermediaries.

Working of government agencies.Export of processed pulses.


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EFFECTS OF INFLATION ONPULSES

Rise of food commodity as asset class.

Difficulty to daily wage earners.Advantage to farmers.

Loss to government.

Hyper inflation.


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CONTROL OF INFLATION ONPULSES

Monetary policies Control in money circulation. Credit control.

Fiscal policies Public expenditure. Imposition of taxes. Public borrowing. Public debt management.


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FINDINGS During our research on the rate of inflation in

the prices of pulses, we visited many places

where we can get the accurate results. In comparison to otherfood products

(cereals), pulse is one with a great stability inthe price fluctuation is 10 to 20%.

The longest period of stability of price

remained for the second quarter and a monthin 2010, i.e, (May-Sep) where the retail priceremained Rs.120/kg in Kathmandu valley.

But still, during the year 2010,the pricefluctuation was recorded to be 20% in

Kathmandu. While comparing the urban CPI, the price isstable more in Terai than in Hills.


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CONCLUSION No doubt, inflation in Nepal has hit severely on

the stomach of Nepalese people, low-income class,generally.

But the effect of inflation in pulses is relativelyless in comparison to other food items. This

implies the sporadic inflation in Nepalese cerealsmarket. Though a small change in price alters the

consumption pattern of the low-income people,pulse has not raised their cost of living

significantly. But anyway inflation is inflation. However, the

inflation in case of pulse can be considered asmoderate, which comprises the factor to operatethe economy smoothly.


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TEAM MEMBERS OFGROUP-FManisha Thapa

Pratikshya Rijal

Rajendra GautamSonia Shrestha

Sushmita Baidya

BBA 2ndSemester

Section-A


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Inflation Pulses

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