Essay Writing on Inflation/Price Rise and Its Impact on Common People
Introduction
Inflation refers to the increase in prices of goods and services over time, which diminishes the purchasing power of money and makes it more difficult for individuals to afford necessary items. In India, inflation is tracked using the Consumer Price Index (CPI). As of December 2024, the inflation rate in India stood at 6.2%, exceeding the Reserve Bank of India’s (RBI) target of 4%. This phenomenon impacts all segments of society, particularly the middle and lower classes.
Reasons of Inflation in India
Causes of inflation in India include rising fuel prices due to global conflicts, higher food prices like tomatoes and onions caused by crop damage, and increased transportation costs and black marketing. Import dependency on items like oil and fertilizers adds to the problem. Excess money in the economy also pushes up demand, increasing prices further
Impact of Inflation on Daily Life
Inflation increases the cost of daily living. Prices of food items such as rice, pulse, and vegetables have increased. For example, in mid-2024, tomatoes were sold at ₹200 per kg, which knocks at a family's budget. Fuel becomes costlier, thus raising transportation costs for students, office-going employees, and farmers also. Fees for education and healthcare are increased, leaving a family to manage the hard to get the basic necessities.
Social Impact of Inflation
Inflation increases inequality. Wealthy individuals can manage price hikes, but the poor struggle to afford essentials. Higher costs of living force people to cut back on nutritious food, recreation, and education. This affects mental well-being and quality of life. Families may even take loans, increasing their financial burden.
Economic Impact of Inflation
Inflation reduces savings, as people spend more to meet basic needs. Small businesses suffer as their input costs increase. At the same time, unemployment may rise if companies cut jobs to manage rising costs.
Way Forward/Steps Needed to Control Inflation in India
Control Prices: The government must ensure stable food and fuel prices through subsidies and price caps.
Increase Production: Promoting agriculture and local industries can reduce supply shortages.
Strict Enforcement: Stronger law enforcement to catch and penalize black marketers.
Monitor Policies: The RBI should regulate money supply and interest rates to control inflation.
Help the Poor: Welfare schemes like free rations and affordable housing can alleviate the pain.
Conclusion
Inflation is a serious challenge that affects daily life, increases inequality, and slows economic progress. Controlling inflation is important to protect common people and ensure a balanced and stable society.
Frequently Asked Questions(FAQs) on Inflation & Its Impact on People
1. What is inflation?
Inflation is when the prices of goods and services increase over time. This means people need more money to buy the same things.
2. How does inflation affect common people?
Inflation makes food, fuel, and daily needs expensive. Poor and middle-class families struggle the most because their incomes don’t increase as fast as prices.
3. Why is inflation rising in India?
Inflation rises due to reasons like crop damage, high fuel prices, global conflicts, and more demand than supply for goods.
4. How does inflation impact savings?
Inflation reduces the value of money. For example, ₹100 saved today might not buy the same items after a year because prices have increased.
5. How can inflation be controlled?
The government and RBI can control inflation by reducing taxes, increasing production of goods, and controlling the supply of money in the economy.