"Inflation is like sin; every government denounces it and every government practices it." Frederick Leith-Ross
India is the 12th largest economy in the world and the second fastest growing major economy in the world, with a GDP growth rate of 9.4 per cent for the fiscal year 2006-2007.
However, the global economic meltdown will hit India's growth in the future. The GDP growth in 2008-09 will fall to the 7-8%, after hovering near the 9 per cent mark during 2007-08.
A country's GDP figures are adjusted with inflation. The gross domestic product in India is now above 8 per cent, if inflation is brought down to zero, then the GDP will be above 12 per cent.
There are different types of inflation:
Deflation: It refers to a general falling level of prices.
Disinflation: This is a decrease in the rate of inflation.
Hyperinflation: When prices zoom and inflation goes out-of-control, it is called hyperinflation.
Stagflation: It is a combination of inflation, rising unemployment and stagnation in the economy.
Reflation: This refers to move to hike prices to fight deflationary pressures.
Image: A woman walks past a sign of a foreign exchange bank in Seoul on March 17, 2008. | Photograph: Jung Yeon-Je/AFP/Getty Images
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