Why High Inflation??

Posted In Thoughtworks - By NitiN Kumar Jain On Friday, June 6th, 2008 With 0 Comments

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How would you react when someone asks you for Rs x more for the same services that have been provided to you for some years?? I think that’s pretty fair as far as the inflation in the country and at the same time our increase in salary is considered.

Generally everyone should agree that things around us cost always more than they used to cost us before while we grew up. I clearly remember the primary school days when I used to get mango ice-cream for 25 paisa only and even for that we used to think a lot. But now Mother Dairy Butter scotch cone for Rs 30?? Doesn’t matter, give me buddy. Earlier Rs 10 used to meet our requirement for the month and mind you that included the bus fare to the school. But now Rs 500 to children in 7th 8th standard seems very less. Even for adults Rs 100 was enough but now no amount can accomplish their dreams. And now human being is capable of spending every penny that he holds in his pocket in a single day.

So what exactly has happened over the years that attitude of the people has changed so much?

  • Is it only inflation?
  • Is it increase of salary every six months or a year, especially in private sector?
  • Or is it something else?

Yes, inflation plays a very big role. Cost of commodities increase every now and then and to meet these requirements people work harder and when they work harder they practically need some sort of enjoyment over the weekend so that they can start the next week with the same enthu that they began the previous one and now there is no limit for pleasure. People spend like anything on cinemas; eat out in restaurants; fun games in malls and shopping branding stuffs. There is no limit now. And this is where we are setting our expectations and bollywood people, businessmen are only trying to meet our expectations and today we can see the result. So effectively who is contributing to inflation, it is us who are doing so.

I know many people might not agree with this, but achieving comfort is the foremost motive of people today and for that they themselves work hard, earn more and spend even more.

Economy says when demand is high and supply is less then obviously prices shoot up. And that is what is happening today. We demand more and more, and it is increasing with days and we keep on blaming the government for the high inflation.

So are we ourselves responsible for high inflation?? Very BIG question, isn’t it??