Have you been noticing something about your money?

Have you been noticing something about your money?

Article By: Aditya Pawar, Intern at Deshdoot Times

NASHIK: Inflation affects everyone’s lives even if they’re not aware of it. When prices rise too much or prices rise but pay cheques don’t, people see a negative effect on their purchasing power and quality of life. That’s the most immediate way inflation affects us all.

What is inflation?

Inflation is the steady increase in the price of goods and services over time. It devalues the currency (change of INR TO USD), resulting in consequences like a higher cost of living. For example, how much did a chocolate bar cost when you were a little kid? Now think about how much that same chocolate bar costs today. This increase is not due to the chocolate or its ingredients becoming scarce or expensive to make. Instead, the price reflects the gradual decrease in the value of money as a result of inflation.

What causes inflation?

We will not go into the technicalities as they are various and complicated, but to understand it in easy terms see it as changes in demand and supply. In summer, there is an increase in demand for air conditioners. As a result, the manufacturers and retailers hike their prices to benefit from the rise in margin. Likewise, due to unseasonal rains, there is a high probability of crop damage, causing a decrease in the supply and increasing the cost of production, raw materials and labour.

Why is it a cause of concern now?

In India, the inflationary rate is controlled by the Reserve Bank of India (RBI). Two major indices are used to measure inflation, Consumer Price Index (CPI) and the Wholesale Price Index (WPI). The cause of concern is that they have been increasing due to the recent and current events occurring throughout the world. We can see it in the rise in prices of goods and services. Noticed the change in lemon prices?

How is it impacting Nashik?

MSRTC, which had been facing a staff crunch, recently announced a rise in their fare prices from May 01, 2022. This is an indication that even subsided services provided by the government are affected by inflation. Even though Nashik is an agricultural district, the cost of staple foods has gone up. In January 2022, the average wholesale price of onion was hiked by 15 percent, from 1850 per quintal to 2150 per quintal, due to a lack of supply and surging demand. On top of that, increasing labour, fertiliser and transportation costs have directly bought the burden on the consumer.

Safeguarding against inflation

Suppose you deposit money in your bank account at an average savings rate of 2.5 percent. Your deposits of 1000 rupees will increase to 1025 rupees after a year, logically right? However, if inflation continues to rise at 6 - 8 percent, then you actually need an interest rate higher to maintain your purchasing power, at least with what you started with. You might have gained a rupee, but you lost the buying power if you can’t match the inflation rate. To really safeguard your savings, you must take advice from a financial planner and plan out the course of your finances. Inflation cannot be controlled at an individual level as it is linked to various factors. What can be controlled is how you use your money.

Prices are going up at their fastest rate than ever before. The prices for petrol and diesel have skyrocketed. I personally have to pay ₹2000 every four days for petrol, which is not a small amount. The prices of basic necessities have also risen, including vegetables and groceries. People are struggling to survive, forget living.

Dr Sakshi Gaikwad

Daily essentials' prices such as cooking oils, cereal, lentils, and other edibles have gone up. Summer is at its peak, and it is a struggle to maintain home budgets when the state has implemented power cuts. Fuel price rise is a daily occurrence, and this commodity is just skyrocketing.

Tushar Bhosale

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