Indian economy is one of the world’s fastest one in spite of the fact that it is not endowed with abundant conventional energy sources, along with it many kind of challenges are their inflation has the largest share among them.
With the devaluation of rupee in 1991, which yells the inflation of 13.8% added by the economic crisis of 1991, has badly affected the Indian economy [1].
But now due to many new initiative taken up by govt. and their increased effort Indian economy displayed a signs of high economy growth with a growth rate of 7.1% GDP in 2016-17[2].
In India due to industrialization and govt. policy like make in India,smart city, and heavy emphasis on micro and small scale industries the amount of energy consumption has increased, thus it is necessary to find out the relationship between the energy prices source and its effect on inflation
India has 0.5% [3]of the oil and gas resources in the world containing 17% [4]of the world total population and it make India heavy dependent on the import for fulfilling its oil and natural gas demand this is Due to the limited availability of energy source especially oil and gas and their continuous increase in energy demand, import dependence is continued to rise and it is estimated that by the end of 2017 total import dependence for crude oilincreased by about8.01% [5]of the total consumption.
Total oil consumption growth for 2016 inIndia takes place at 5.3% [6]as the govt. has not made any breakthrough in the renewable energy, oil and gas would continue to hold a key importance in the Indian economy. But apart from it India willremain the least explored countries in the world at a well density of about 20 per 1000 km2 [7]and out of the total the 26 sedimentary basin only eight have been explored[9] so for and all these make India a desired destination in term of opportunities
Due to the govt. policy of distributing oil and gas inIndia with heavy subsidy,it create a huge deficit, as their price move up or down inflation also follow the same pattern, which adversely effect the society especially the middle class and lower middle class family due to their increased cost of living. The main reason behind it is oil price because it is an major input to our
Article Details
Unique Paper ID: 145532
Publication Volume & Issue: Volume 4, Issue 10
Page(s): 327 - 333
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