What is effects of inflation on primary,industry and servic sector of indian economy in last 5 years?
Inflation has a direct impact on wages. When the workers have to be paid more, it gets reflected in the high cost price of the product. However, in services there might be some slack. Inflation reduces the profit margin. With this margin narrowed down, the companies have to pare profits that ultimately get reflected in their share prices. This leads to the investors withdrawing their invested money and go to other locales, other products or producers that offer higher dividends. Services sector is the biggest employer with wage component of their product the highest. Agriculture if it is labour-intensive like in india, is affected by inflation and there will be a general shift to mechanised farming. In industry, when the wage bill goes up, it might lead to lay-off, retrenchment or sacking swelling the ranks of unemployed. This is bad for economy. To circumvent such undesirable effects and to reign in unemployment rate, governments and banks will be forced to take drastic economics meas
