'If cost rises price are bound to increase'. In the context of this statement explain the causes of cost push inflation

indian-economy
cbse

#1

Causes of cost push inflation are :
(i) A devaluation will increase the domestic price of imports. Therefore, after a devaluation we often get an increase in inflation due to rising cost of imports.
(ii) Wages are the one of the main cost paid by the firms. Rise in wages will push up prices as firms have to pay higher wages to the labour.
(iii) Higher VAT and excise duty will increase the prices of goods. This price increase will be a temporary increase.