Increase in general price level due to increase in demand without any corresponding growth in output is called inflation. When increased spending leads to economic growth, it is called inflation. This reduces the value of the home currency and won’t let it buy the same amount as it would earlier. The rise in the general price level is always on the board. Rapid hike in prices has called for great frustration and unrest among the people. Inflation is a product of excess demand in the economy. However, due to this product, the rich become richer, and the poor become poorer. In spite of the fact that the concerned authorities have taken up many measures to develop the economy, inflation is still a matter of concern. Lack of general awareness is the primary reason that all the measures of planned development fail each time. Also, India being a vast nation, the least information percolates to the lower levels. The unaware customer allows himself to be robbed due to which he is no less to be blamed for the state of affairs.
Moreover, moving towards urbanization and achieving better standards of living, has rapidly increased the cost of living. People, these days demand more than they used to demand earlier. Continuous fall in the rupee can also be a reason to this change in the demand. A significant chunk of the government’s annual income is its taxation policy. The taxes they receive from the ordinary people are used for public welfare and to make living easy for the public. But there exists a lack of control and check over government spending. Corrupt officers have pocketed a good amount without any shame, which results in low-quality services and creation of numerous loopholes in the system. As a result, the benefits of these expenditures do not reach the public. Inflation majorly affects the middle-class people and the salaried people. There is a continuous rise in the most used commodities like kerosene, petrol, railway fares, cooking gas and other items of daily use. Such unforeseen price level changes have left the common man helpless. Greedy traders, black marketeers and hoarders should also be brought to light with the corrupt officials. Hoardings of essential commodities, deprive the nation of much-needed resources. Moreover, it serves as a bad example.
As government alone is not responsible for such plight of the economy, customers will also have to join hands to bring down the continuous price rise. The loss of faith and morality caused by inflation can be revived with the help of government’s fiscal policy and RBI’s monetary policy.
Government should curtail all the wasteful expenditures as in this way it would reduce the budget deficit. Secondly, price fixing in the case of commodities of daily use can also be a measure of aid. Malpractices like hoarding should checked and regulated. These kind of practices should be strictly discouraged. A suitable system of distribution should be developed for the lower section of the society. General mob can try and invest their money in equities. Buy assets because equities are a better bet on the face of inflation in comparison to bonds and cash.
Right intention to make India, a better place is all what we need. Let us join hands and help our government to bring down the soaring prices.
As every coin has two sides, inflation also has a better side. According to some economists, inflation is good for the economy to some extent because if deflation prevails in the economy, situations can be worse. Deflation compels people to stop spending which ceases the money supply and further increases deflation. The entire economy can collapse. Inflation is considered to be a good indicator of economic growth unless it is hyperinflation.