Inflation is the biggest problem in developing and populous countries. In which consumption is high and yield is low. Inflation arises due to many reasons. Like more population, less yield, less availability of land for produce, hoarding, etc. Due to which the demand for commodity increases and its price increases when its quantity decreases. Different countries of the world have different methods to measure the inflation rate. If we talk about India, then here the inflation rate is determined with the help of the Wholesale Price Index. Changes in this index are considered to be indicators of changes in inflation. But for some time, many other countries including India have been using the producer price index to measure the inflation rate. Inflation has more effect on poor people because their income is not enough to meet their needs. Due to which many other social problems like looting, theft, black marketing, adulteration, corruption start to arise due to which society and nation get corrupted. A useful national policy is needed to reduce inflation. In India, many laws have been made for the proper distribution of the consumption of necessities. Food Supplies Departments have been set up for the supply of food grains in every place. Ration shops have been opened at various places. If the system of distribution of food grains is proper then inflation can be stopped but it does not happen.In such a situation, it is important to know that what is the effect of rising inflation on India? How inflation poses a challenge to India's development? What are the reasons for rising inflation in India? The research topic has been selected to find answers to the above questions.

KEYWORDS: Inflation, Producer Price Index, Populous Countries, Indian Economy, Price Hike.