Inflationary Income Distribution

Abstract

In the first few years after the 1965 reform, the annual rise in the cost of living was kept to single figures but then it began accelerating as indicated in Table 6.2. While in 1967–70, the rise in the cost of living was 7.7 per cent per annum on average, this rose to 19.6 per cent for 1971–75, although the average rate of growth dropped slightly from 6.3 per cent in 1966–70 to 6.0 per cent in 1971–75. There was some discrepancy between the rate of increase of prices of industrial and agricultural goods, but on balance not all that much. (Industrial prices rose 5.2 per cent in 1966–70 and 18.0 per cent in 1971–5; agricultural prices rose 6.6 per cent in 1966–70 and 20.4 per cent in 1971–5).