Inflation

Inflation is the increase in the price of certain commodities which have been predefined based on the prices for same for the same week past year. The causes of inflation are basically the more inflow of liquid money into the market i.e. more is the money with the people more is the purchasing power so the prices go up. One of an important factor is also the easy availability of loans and that also at a smaller rate of interest. There can be many more reasons like oil prices, transport lags, storage problems and so on.

Now the measures which can be taken to control it are that RBI could suck out liquid money from the market that can be done by increasing the repo rate and secondly it could make the bank laws more stringent i.e. the interest rates on the loans can be increased.

Now the effect of inflation is mainly on the commodities of daily use. This makes the life of a common man more difficult but on the other hand as the economy is growing the inflation increases as a side effect. so we can say that inflation is the price one has to pay for economical growth so the onus lies on the policy makers of the country hw to sustain growth as well as keep a check on rising inflation.

Inflation can be controlled only by government policy and utilizing the funds properly and it should not go in wrong hands.

Inflations occurs when the buying power of people increases but the supply of the commodities remain the same. As supply cannot meet demand to neutralize the situation prices of commodities, interest rates on loans etc rises also the interest on deposits falls. As a result of this, condition will be more congenial for saving rather than spending. Inflation will affect the people will fixed income the most. Their income will remain the same but the prices will rise.

The problem with inflation is that it should be there at a certain level. it should not be too high nor should it be too low. The problem the Govt. is facing is that they don’t want to enforce stringent measures to curb inflation because India is growing and if in the name of curbing inflation something is done and industries backs off from investing it will have a long term ill effect. So the Govt. has to walk on a thin wire. My best wishes to the Govt. from marinating this balance as it has to make sure that the peoples are not affected and the growth of the country is not effected is either.

Inflation is a harsh reality which is being faced by the common people of the society. It affects all of us in some way or the other. A thing which you have been using for years at a cost of Rs. x then if now you have to buy it at a cost of Rs. x+y then it really hits your pocket. The whole budget of a the people belonging to the middle class section of the society gets disturbed. It will not affect the people who are well versed if they have to give Rs. y more for a product, but for the poor people who hardly manage to get their bread & butter have a real impact on their pockets.