When I ask this question, most people say 9-10% p.a. – just by adding about 100 basis points to the P Chidambaram’s random generated number of 8%.

This of course is just another case of innumeracy. The real number in the past 3 year is much higher. RBI and MoF are both aware of this number and hence their silence. Both RRR and his predecessor at least accepted that inflation is an important monster and we should fight it.

I did an exercise with a few friends and found that school fees, school bus charges, medicines, doc fees, etc grew at a clipping rate of 15% p.a. This means if YOUR income is not growing at ATLEAST that rate, YOU HAVE GOT POORER.

Here is an interesting article…read on

http://www.firstbiz.com/economy/inflation-small-things-bites-hard-52644.html

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  1. I too was sure from a long time that these babus are even playing with these numbers. There is no room left in which they haven’t played.

  2. My local Vada Pav wala charges Rs15.

    And outside the Vashi Station near Reliance Digital they charge Tea Rs8-10 and Vada Pav (Tiny one )Rs14..

    Once asked them they said the major problem for them is the GAS.

  3. I had bought a syrup for my child exactly 2 yrs back… its cost was 32 rs then… recently rebought it for 44…17% compounded price rise !!!!
    also ask the rate of increase in refill prices to those who are using gel pens…. :{{

  4. Yes and now PC has reduced the excise duty on cars. See how much he cares for a middle class man.(Or is it for the auto industry who is having a tough time 🙂

    So happily people will forget the Inflation and buy a 6 lakh car when earlier they would have bought a 4 lakh car.Great move from PC 🙂

  5. Globalization and brand snobbery are partly to blame. Most middle class now have access to a 150 rupee coffee and 300 rupee burger. Most don’t notice the 3 rupee doubling of chai rates. Some who do, can’t do anything about it since these services(driver/ironing/car cleaning) are essential.

  6. Vaibhav – globalization did NOT bring in inflation.if at all,it reduced prices.
    the 150 rupee coffee is NOT the same as the 3 rupee cutting chai.they are both different experiences.you dont believe people are paying for the commodity called coffee at starbucks ,do you?
    people pay for many things: including the privelege of hanging out with their buddies at a hip place

    the only cause of inflation,everywhere and all the time is: MONEY supply increase. M3 has been galloping in india since so many years now.above 13% compounded for most of the bull run in stocks,real estate and everything else. money supply goes up,prices of everything goes up.the prices of stocks and real eatate also are affected while smaller things take more time for prices to adjust upwards because the small players face more competition and less opportunity to increase prices right away.

  7. Dr Koustubh Chakraborty

    I like the phrase, “P.Chidambaram’s random generated number of 8 %”, which is very true, since at ground level, whether we’re buying fruits & vegetables or paying educational fees, the figure is easily 20% or more !!

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