Make rational choices of goods and services, and effectively deal with rising inflation.

According to Wikipedia, Inflation is a rise in the general level of prices of goods and services over the time. Economists say that high rates of inflation are caused by high rates of growth of the money supply with the people. Changes in inflation are sometimes attributed to fluctuations in demand for goods and services or in available supplies (i.e. changes inscarcity) and sometimes to changes in the supply or demand for money.

Last few years Indian economy is growing remarkably and grabbing opportunities available in the world market. The huge foreign investments and equally favorable economic conditions at home have helped bring more and more employment. However, currently India is suffering heavily at its economic growth from a consistently rising rate of inflation. The main cause of inflation has been the pricing difference between the producers and the consumers. The high price of foods, manufacturing products and essential products have further pushed inflation rate in India. Generally, it has been believed that the rising inflation is consequence of current crisis in global economy and it is mainly attributed to rising prices of crude oil in the world market.

In India, when prices go up, especially prices of food and necessary commodities; general people express concerns simply because they find it difficult to meet their needs. Media and political parties in opposition quickly seem to take up cause of general people at large, and then everywhere we hear peoples’ concerns over rising prices. People do tend to speak how inflation and rising prices disturb their individual monthly budget and how they are loosing out on their savings. I have been hearing people’s worries on inflation in my neighborhood, at my workplace, in restaurants, in public buses, at shopping places and almost everywhere.

Quite interestingly, I have listened different groups of people expressing differently on rising prices…I mean their needs and choices are different and they are generally based on their level of income. A group of people saying that they are not just able to cut on their life-style costs…they say maintenance costs at home, shopping and partying on weekends, going for monthly travels and trips, providing children with their demands and overall entertainment costs have turned as basic needs and they just cannot easily be compromised. On the other hand, a different group of people having different set of choices of goods and services they found to have coped well with rising prices, yet they are worried about rising prices of foods and essential goods and services. They said they are finding it too costly to pay for rising monthly grocery bills, loan interest rates, fuel bills, and tuition fees of children. They said they are managing well with rising prices provided they maintain their life-style expenditure at modest level.

Not only individuals, corporate companies have also recognized the fact that they need to cut down their non-operational and non-productive costs as a way to deal with rising rate of inflation and crisis in the markets. In short, first of all they have introduced rationalization in their various expenditures.

The rate of inflation is actually bared differently by two groups of people spending in different proportions on set of services and goods when prices of services are more or less than from the goods. Hence, we can say the rate of inflation is different for people to people and it is depending on their proportion of spending respectively on set of services and goods. So if you want to deal effectively with rising rate of inflation, keep your life style expenses minimum, and bring rationalization in your expenditures.