The purchasing power of the consumer is highly dependent on inflation in India and the globe. Due to the presence of inflation, a clear measure can be seen in the cost of goods and several services increasing with time. As a result, buyers can feel the effect on their lives when it connects with their spending habits and addresses personal finances.
A clear and simple example of the inflation rate in 2022 is when you buy a list of items from the local store or online for a total cost of Rs. 1,000 and then you see a few items getting costlier the following months, which brings the total bill amount to Rs. 1,200 in the next month. As a result, you have two options, i.e, either to buy the items with the inflated price or remove a few items from the list. No matter in which direction you go, there will be a blow in the monthly budget if you do not increase your income.
Business Outreach Magazine brings to our readers the inflation pump that you should keep an eye on. In the market, if the price of any product increases, it can move towards instability in consuming the goods and services and this will create inflation.
Reports from economists say that a moderate form of inflation will drive consumption which is enough to obtain stable growth in the economy. On one hand, high inflation is a disadvantage for an economy and on the other hand, low inflation or deflation is equally troublesome.
Ways to measure inflation :
Inflation in India depends on two indices, which are the Consumer Price Index (CPI) and the Wholesome Price Index (WPI). These are the two measures to calculate price changes in available products in the market. This inflation calculator assists the Reserve Bank of India to keep a close eye on the trajectory of the economy in India.
The CPI or the Consumer Price Index records the retail inflation of several products in the Indian economy across a range of about 260 commodities. The rate of retail inflation of CPI takes into account the changes in the price of consumer goods.
The WPI or the Wholesale Price Index analyzes 697 commodities when it comes to goods inflation. This is where the inflation is recorded in the prices of goods bought at a wholesale rate from a store, factory, or any other place.
Records clearly indicate that the current inflation rate is at about 7.41% in September 2022, which was about 6.71% in July, 7.04% in May, 6.95% in March, and about 6.01% in January when it comes to CPI. For WPI, it was 12.41% in August, 15.88% in May, about 14.55% in March, and about 12.96% in January, 2022.
We can clearly see several spikes in the CPI and WPI figures and have a better understanding of the market.
Can we beat inflation?
The Indian Government announced several measures to keep inflation under control. These steps included cutting excise duties on fuels like petrol and diesel, reducing the import duties on essential raw materials and edible oils, increasing the repo rate (interest rates on loans) by RBI, and many others.
The rising monthly expenses will make the consumer figure out better strategies to maintain cost-effective spending habits. It is important to plan save and invest in the right places to keep up with inflation.
