Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.;
5. What is the inflation? Differentiate between demand pull and cost push inflation? Highlight the supply-side factors behind recent inflationary trends in India. (250 words)
Difficulty level: Moderate
Reference: The Hindu
Why the question:
With the Union Budget 10 days away, many economic observers are now focused on what support the Centre can offer the economy, which is still struggling to recover from the pandemic.
Key Demand of the question:
To write about the differences between demand pull and cost push inflation and the factors causing inflation in India off late.
Structure of the answer:
Introduction:
Begin by defining inflation.
Body:
First, in detail bring the comparison between demand pull and cost push inflation. Nature, factors causing it, effects etc.
Next, write about the reasons for increasing trends of inflation in India off late and its impact.
Next, suggest steps to overcome the same.
Conclusion:
Conclude by writing a way forward.
