Directions (Q.5-Q.7): Read the passage carefully and
answer the question.
Passage: Inflation may be defined as an un-anticipated,
rapid and substantial increase in prices above the normal
level of all goods and services in an "uncontrolled"
economy. The spectre of inflation has been haunting India
since the outbreak of the Second World War. But never
has the pinch been felt so severely or so pervasively as
during the last five years. The fundamental question
facing the country today is how to check the galloping
inflation to save the economy from further erosion. The
rapid rate of inflation and its cumulative impact on the
growth and distributive pattern of the economy witnessed
during the last two years is indeed a matter of grave
concern. The index number of wholesale prices increased
by about 13% in 1972-73 over the previous year and by
30 per cent in 1973-74 compared to 1972-73 or by over
45 per cent during the two-year period. Therefore, if
garibi hatao has to be meaningful, we must fight inflation
with all our might. The anti-inflationary methods
obviously require the study of the causes of inflation. The
Indo-Pakistan war of 1971, the exodus and repatriation of
9 million Bangladesh refugees followed by an
unprecedented drought and floods in a large number of
states involved public expenditure to the tune of several
crores of rupees. The shortfall in the indigenous
production of food grains meant more of imports at higher
prices which in turn, involved increased subsidy.
Q5. It can be inferred from the passage that the problem
of inflation started to haunt India since