Inflation and its Impact on Economy and Life

Inflation is something that is part of everyone's life. We are affected directly or indirectly because financial decisions are taken by the government on the basis of inflation. Every quarter the government shares some data and a percentage of the inflation in the last quarter. Usually, I believe that majority of people are not aware of how it works but that does not mean they are not affected. People who are good in the economy and financial management are aware of this financial term but for a common man, this is complicated.

Increasing inflation is not good for the economy because this result in price increase for basic communities and statues are required to pay more money for the same goods and services. This is how inflation hit our life directly or indirectly but there is no way that we can exempt ourselves. If I talk about myself then I would say I am affected in many ways. One of the reasons why I am affected is because every quarter RBI makes some changes in the repo rate on the basis of inflation. Because of this change by RBI, my monthly loan installment gets increased most of the time. This is not a good thing I would say because no one likes to pay more money to the banks.

What is Inflation

If we talk about inflation in simple words then it is a process in which the price increase for goods and services happens in the country. The government is required to do this because they need to run the economy and it becomes a necessity for them but this money comes from the consumers who are the citizens of the country. This price increase also reduces the purchasing power of consumers as our income does not increase as compared to the inflation rate. A person who is the president on the salary gets a hike on this once in a year but because of inflation, he has to deal with various price increases on multiple goods and services. It is not possible for everyone to generate additional income and that is why a major chunk of people control their purchase power and try to manage in limited quantity if it is feasible.

As I said that one of the biggest concerns I face with inflation is that I am required to pay more money to the banks for loan installments. It happens every quarter and even if I pay more amount then also my capital outstanding remains the same as it always happens. Read a slight increase in repo rate affect the interest rate and it has been increasing consistently over the last few quarters.

Inflation Impact

This is one of the situations where the government takes decisions to make the economy stronger but I would say that they should try alternative ways to overcome the challenges. I do not have a death knowledge about this economy and how it works but as a user, I know how I am impacted and what government should do to avoid the situation. I'm sure that there are many more people like me who deal with similar challenges but they are helpless because there is no way we can complain and we know that nobody is here to listen to our problems. So inflation is for the people who are called middle class because the higher class is not bothered about it and for the lower class, it is an already difficult life. As I said for the lower class it is already a challenging life and a slight top-up on that will not really make a bigger difference but the fact is they have to deal with many challenges in their life just because of the inflation.

After the covid pandemic, there has been increasing in almost everything that we use in our day-to-day life. It's not about just the communities and services but also the fuel cost that increased in the country last year. Increasing the cost for the sake of inflation is an easy way for the government and they hardly care that they should look for alternate options and even crypto can be one. Unfortunately, they are more worried about the economy and they go the easy way but they are least bothered about exploring alternate ways including crypto to find solutions. Crypto is a revolution and it has the power and potential to make the economy stronger but the fact is that most countries are not thinking this way. I hope that sooner or later countries realize the potential of crypto and blockchain where they find a solid solution to make the economy stronger and reduce inflation.

Thank you

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