Inflation in India: a compilation of comments

Published: October 1, 2013 at 8:56 am

Last Updated on June 24, 2016

Last week I posted a rather non-technical take on Inflation in India: Will it ever decrease? The  post triggered many interesting comments

I also received some interesting responses on Linkedin. Here is a compilation of comments from various Linkedin groups.


Author: Jyoti Kumar, Director- Development (Co-founder) at Bazaar Analysis Pvt. Ltd

Inflation is simple demand supply game. GDP/GNP (nutshell whatever we produce) of country is on one side and supply of currency on the other side. On GDP/GNP side we have multiple problems. Political reasons are on the centre. But, we should also blame our social or cultural part too. In some states politicians are distributing free electricity to farmers at cost of killing manufacturing units then on some other states they are failing to collect the electricity bill in fear of losing popularity and so, poor supply of electricity and no growth of industries.

At moment we have a major amount of assets blocked in half backed real estate projects. In 90s we had really need of real estate but today it is over supply and government never realized this to stop diversion of money in this sector on the right moment.

Our service sector just need 0-6 year experience people. Beyond that they don’t have high quality work and their resource become costly for them. So, silently they are dumping people beyond 6 year of experience and our government has yet to realize we are going to face major unemployment issue with people having work experience (unlike till early 90s we had unemployed with no experience)

In the mean time we have killed our conventional engineering and just converted all talent to software engineers.

As a society we need too much security and retail investors have blocked their 2/3rd investment in fixed deposit and stupid insurance linked investments that money almost not available for growth of the industry.

inflation in india: insights and c omments
Photo credit: tico_24 (Flickr)

Our investors’ community never want to take a risk or judge the concept at idea level (whatever they claim to do so). They want to put their penny only on the idea which has started yielding. We don’t have investors’ community like who funded Amazon.

Let us come to the other side of the equation. For currency we have copied the fiat currency model from US. We are printing and distributing currency without accountability. In the case of US, whole world is trading crude oil with US$. Virtually, gulf crude production is getting added to GDP/GNP of US. So, printing of extra currency is balancing out. However, we are printing much more than our own production.

Conclusion: Can we control inflation? Yes, we can because we have all resource and talent to do the same. But, we need change in political setup, priority and our own attitude.


Author:  Harjeet Singh Kalra, Guest faculty, Management studies at Panjab University, Educational Institution, Chandigarh

Keep the exchange rate under control by keeping the economy open to foreign investment which will keep up the inflow of $ and this shall enable us to meet the demand for $ for import of oil and also keep the oil prices from rising in rupee terms. Rising rupee costs of imports(oil) adds to inflation


Author: Division head of an AMC (not sure about AMCs social media policy , so don’t wish to name the author)

Good one and probably reflects the general sentiment…inflation never seems to come down….only observation to add….even good rainfall is not enough to bring down inflation as can be seen amply from the recent sharp rise in onion prices in spite of abundant rainfall …….moreover due to subsidies (again the major culprit) and skewed crop sowing pattern (due to MSPs again determined by govt) the food for which demand is growing like oilseeds, pulses, proteins etc we are not able to increase the supply


Giovanni Chiampesan suggested (in the post) that I watch a very interesting video by Amercian economist, Milton Friedman on inflation.

Giovanni says, “Inflation is a purely monetary phenomenon caused by an excessive supply of money. Your new head of the Bank of India should be able to curb it since he’s from the Chicago School. See  How to Cure Inflation

This webpage has simple and illuminative description of inflation:

“Inflation results when the amount of money printed or coined increases faster than the creation of new goods and services. Money is a “token” of the wealth of a nation. If more tokens are created than new wealth, it takes more tokens to buy the same goods.”

The same video is also available on youtube


I would like to thank all readers for sharing their insights. I understand that it is a significant expenditure of your time and effort. Thanks to you I understand about inflation so much better.

Do share if you found this useful

We now publish both equity fund and debt fund (+ hybrid fund) screeners each month!
Use our Robo-advisory Excel Template for a start-to-finish financial plan! Now with a new demo video!  More than 415 investors and advisors use this!
Unlock the secrets of successful financial advisors and entrepreneurs with our new course!
My new book for kids: “Chinchu gets a superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both boy and girl version covers of Chinchu gets a superpower.
Most investor problems can be traced to a lack of informed decision making. We have all made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, if we had to groom one ability in our children that is key not only to money management and investing but for any aspect of life, what would it be? My answer: Sound Decision Making. So in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parent’s plan for it and teach him several key ideas of decision making and money management is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Did you know? We have more than 1000+ videos on YouTube to explore! Join our YouTube Community!

Join our courses in exclusive Facebook Groups!

  • 550+ members are now part of our new course: How to get people to pay for your skills! (watch 1st lecture for free). Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show how to achieve by showcasing your skills and building a community that trusts you and pays you!
  • Goal-based portfolio management! Join 2220+ members and get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free!  One-time payment of Rs. 3000 only. No recurring fees! Life-long access to videos (10+ hours content)  in an exclusive Facebook Group! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.

Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!), or you buy the new Tactical Buy/Sell timing tool!
We publish mutual fund screeners and momentum, low volatility stock screeners .every month.
About the Author Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations based on money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association, IIST Alumni Association. For speaking engagements, write to pattu [at] freefincal [dot] com
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions, seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)
Free android apps