Inflation, Inflation,inflation!!!!. What is inflation and what impact it has on price rise of essential commodities ?Everyone, from the opposition party to the common man are talking about inflation and price rise. The media flashes "Breaking News" of the weekend inflation numbers and debates endlessly about its impact on the Indian economy.The economists dread these huge inflation numbers and worry about its direct impact on price rise.Indian inflation for this weekend is 7.41% as against 6.98% the previous week.
Inflation is a direct relation between the supply chain and demand for the product. When the demand inflammates and also the supply of the goods decreases, the prices obviously goes up.The rate at which the prices of everything go up is called the "rate of inflation". For example, if the price of something is Rs.100 this year and next year the price becomes approximately Rs.104 then the rate of inflation is 4%. If the price of something is Rs.80 then after a year with a rate of inflation of 4% the price go up to (80 x 1.04) = Rs.83.2.
So, a higher rate of inflation means the value of the product, you buy increses or the value of your money reduces.That is why, the Left parties and others demand the UPA government to take necessary fiscal measures to bring down the inflation rate and also the prices of essential commodities.
The Finance minister says that the global prices have risen up and so the prices in India also go up. It is learnt that inflation in many countries at this point of time is in double digits.
China - 11.5%
Turkey-9.3%
Venezula-22.4%
So, only way for you and me is to spend our money tactically and save some for the future.
