The decrease in agricultural output is one of the reasons prices have increased. The media in India focusses almost exclusively on metro cities and forgets that agriculture constitutes a  major part of the country’s GDP. Successive governments only pay lip service to their concern about the welfare of the farmers, few have implemented any concrete measures to increase the per hectare crop output.

The second major reason for inflation is the increase in the oil prices. Though public transport systems exist in many parts of the world, owning a car has become a status symbol and people use a car for traveling even short distances. Since oil is a fossil fuel, its supply is limited and as the demand increases, the prices of crude oil have reached $135 / barrel in May 2008. Since oil is extensively used for transporting commodities and finished goods, this increase in cost has been passed on to the end user.