As we see more & more corruption coming in bureaucracy, inflation is never going to cool down. We normally criticise bureaucrats for being corrupt and just say, "Hume kya" and we forget about it. But the businessmen who are giving huge bribes to these Govt. Depts. for every small job are not devtas. They are passing on everything whether legal (taxes) or illegal (bribes) to the consumer and that's why we see inflation never cooling down. Even the figures which Govt. show in the range of 4% to 6%, who knows whether these figures are manipulated. I had ones read public reviews in DNA newspaper regarding inflation and most people agreed that inflation might well be more than 15%. Just try remembering your bare minimum household expenditure (forget about lifestyle & EMIs) say 3 years back and today, you will be surprised. It's all because of our PC, not Personal Computer, but P. Chidambaram. The more aggressive he becomes in removing black money from the market (though politicians are the ones with largest chunks of black money that is a separate thing) the more these bureaucrats & capitalists are becoming aggresive to earn it. End of it all, it's always middleclass (whether US, India or any other country) who suffers because of money games of the bigwigs.
why the hell should prices come down if there is a drop in inflation? When inflation "comes down" prices are rising at a "lower rate", it does not mean that prices have stopped rising.... Its a simple concept which you seem to fail to grasp...
For the past 5 months I do not see much difference in our monthly expenses. but whenever Prime Minister or Finance Minister say some thing inflation comes down so obediently. if comparison is made with reference to rich people it may be alright. but the real comparison is to be made with common people who are really affected , when prices of groceries and vegitable increase, then the calculation should be based on CPI. In fact my monthly expenses has slightly incresed as I pay more for rice,vegitables and milk.inflation down. struggling to get convinced my self.
What kind of hell show Indian government looking into...a middle and lower class man getting worse day by day, rupee value is getting increase but no commodity is coming down or quite reachable...What kind of social responsability is teaching by our honorable prime minister and Finance min.
While it was the hard truth which the American and other supporting countries were igonering since many years. The Economy of America has collapased long ago but there were none to understand this. On one hand American governments have playing with the price of Oil and on the other hand they are importing goods from weaker economies. This has created illousion among the these economies that there exports are growing even if the oil prices are high. American got the feeling that they can purchase anything on this earth so the spending was high. To counter those who understand this fooly, there was a war on Terrorism. Where are the WMD in IRAQ? Actually it is the refusal of Saddam to continue trading in dollar which was termed as WMD. Who breeded Osama and who is fighting for Osama? Now that world is realising still (slowly though) that this financial crunch is coming up. Days are not far when dollar will touch its all time low. This has to happen as America has no other option but to get money from these weaker economies to keep its market alive. Now America will start recovering the debts and again become No.1 economic while these so called emerging markets will become 3rd world or economically weak countries. A big eye opener for Indian who got into the habit of spending too much leaving the cultural values which has tought us that ONE Rupee saved is One rupe earned.
This is what most of the public and professional accountants should ask the Ministry fo Finance and Economic Affairs. Can't we see it? It is glaring that the equations/formulae used to calculate does not take into account certain economic factors which would bring the fact of inflation rate OR the durables pricing?? My immediate thought is that there is no link between the two. Everyone wants to make money and the industries seeing the 'buying power' going up tries to capitalise on it. The inflation rate more or less now seems to be a computation of money in circulation irrespective of how it happens? Want my services?? Yes, I can do it being a Chartered Accountant and having spent time as CFO of multinational financial institutions. But who cares!!! There are so many like me with more experience and knowledge base but the 'power mania' is the mindset of the bereaucrats who think that they SUPERMAN of the earth and do not want to hear and have a 'transparent' discussion on a review of how to compute inflation and how to link it to the common man's living.
You have very rightly pointed out the big problem being ignored by so called experts? The life of a middle class has been made more difficult by making him borrow more and more.And another important factor of concern is the increasing rate of crime,intolerance and greed for grabbing everything for self,forgetting MK Gandhi,s words that there is enough for everyone, but not for greed of everyone. Secondly, I will like to point out that today we are getting business in outsourcing because of lower cost which is rising steadly.We will loose this arbitrage sooner or later as other underdeveloped/asian countries are fast entering the field.So the policy makers needs to take immediate action to control prices of food and housing and must come out a clear policy on retailing which is further fuelling the commerical space resulting in high costs to consumers.
RE:Inflation down, but why are prices not dropping?
by R CHANDRAHAS on Jul 30, 2007 10:01 PM Permalink
You have not understood the concept of inflation. It is simple arithmetic. The Cost of a shirt was Rs. 100/- in the base year. Nest year it doubles to Rs. 200/-. Here the rate of increase of the prices ( related to inflation) is 100%. But what happens the very next year when the prices goes up from Rs. 200/- to Rs. 300/-. The rate of increase is only 50%. Thus even though there is a fall in the incremental rate ( inflation rate) the price is still increasing. Hope you got the maths behind it. Best of luck with the inflation. Regards, R.Chandrahas
