Inflation in India

Inflation in india is 8.75%, highest in the past 8 years.

Inflation is a normal issue in any country. Developing or developed doesn't matter, inflation cannot be completely eradicated and should not be. There should be certain amount of inflation in the country for a very safe economic situation. Lets not forget the fact that many African countries face deflation. Even inflation can be tackled, but deflation, is a real mess.

Inflation in India has been in the rise during the last couple of months. If you had constantly followed, the rise in inflation was set by rising oil price (right now, oil price is flirting with 130$ per barrel) and food prices around the world, weak US dollar, recession fears in US, many many more. Everything is interlinked. That is the biggest of all the problems. Until normalcy sets in every aspect, Inflation cannot be controlled. But rest assured, this is a temperory state. It will definitely change. But will take time.

As our Finance minister said in his book 'View from the outside', "Inflation will not affect the rich people. It will only affect the savings of the middle class people. But poor people will face the worst side of it. That is why inflation is a serious issue in India."

The government has been doing a lot to control it. They have literally stopped exports of all food products, hoping to control the food prices in the domestic market, but fueling the global food price. (Starving the neighbor for the entire country's good is still a bad thing, but that is a complete different issue). One very bold decision by our Finance minister is forbidding the Futures trading. It has already created tensions in the Indian stock market. But i think that is a necessity now. "Futures trading" is a big concept, but to be short, it has power to increase the price of anything. (Ya, anything, from oil to steel). And we all saw what this can do to Oil price.

Finance minister P.Chidambaram & RBI Director Y.V.Reddy

They have increased the CRR (Cash Reserve Ratio). They hav increased the Repo Rate. They are doing every thing possible. Lets also not forget the fact that the indian economy is expected to grow more in this year, inspite of all the crisis.

The reason i write this is because i went to Mustafa centre twice in the past 2 weeks looking for rice. For your information, Indian Rice is not available in Singapore right now. Same is the case in many foreign countries, as India stopped exports. There was a huge line waiting for some good ponni rice. Also, the price of 1 Kg ponni rice was 1$ few months ago. But it is around 3$ today, that too you will get it only if you are patient enough to wait for 2 hours. Well, i just cant wait for two hours. So instead i bought some Lily fragrant Chinese rice. Ya, you heard it right. When you cook, the rice will smell like Lily. It should be fun !!