Posted by NoeL in ,

We can hear the word ‘inflation’ everywhere for the past 1 month or so… How many of us are aware of what it is? What are its implications?
I would like to explain what it is in the eyes of 6 different people… viz. House Broker, Politician, a Finance guy, RBI, Ruling Party and a Layman!

House Broker
For him, it is a good thing. He can now give away houses for rent at a much higher rate. Though he is not aware of what actually inflation is and what its effects are, he knows that the prices are increasing… which is for him, an increase in the rent… blessing in disguise!
Who suffers? The man, who is in need of a rented accommodation.

For him too, it is good thing. After all, he is having a social cause to make noise on and attract attention. This is his golden chance to establish himself and his party. Politician need not turn towards think tanks to come up with ideas like ‘some party’ in Mumbai did recently.
Blind followers of the party will call bandh or harthal and even not hesitate to call it ‘INTERNATIONAL’ when the whole thing will be confined to his neighborhood. Nothing comes out of it.
For the ruling party, it is a very bad thing. For the opposition, it is their golden chance to win the next election.
Who suffers? The man, who is paying a higher price to day-to-day essential goods, viz. rice, vegetables etc.

Finance Guy
This guy mostly will be a finance graduate from one of the premier institutes in India / Abroad. He will start analyzing the so called ‘inflation’ using his various tools… There is nothing much this guy can do… Also this guy is not worried much about it. Because, he is someone whose income has already touched the stars!!
Who suffers? Not him. Not his organization. But the common man who is not even aware of what inflation is and how does it look like…

This is the most difficult period for the people in RBI. They have to somehow control the inflation. They will start making changes to the monetary policy. (CRR, Repo, Reverse Repo rates!) They have to somehow bring the monster (inflation) down! Tighten the credit… Reduce the money that is being circulated in the market… etc etc..
Any change in monetary policy will take approximately 4-6months to show its effects.
Who suffers? The same common man…! Whom I prefer to call a layman…

Ruling Party
This is the worst thing that can happen to them! Not because they are worried about its effect on the common people. They are worried because, the opposition party or the politicians will make this the biggest weapon to use against them for the coming election. Sleepless nights ahead of them…
Ruling party will start amending its import – export policy. They will start campaign against hoarding. They will try to do whatever they can. After all, they have to win the next election…!!
Who suffers? Should I say who AGAIN??

For this poor guy, life becomes a burden. He have no idea what inflation is or how it can be controlled. What he knows is that, his daily expenditure is going above the roofs. He might even think of joining the politician (whom I described above) and his party, thinking that, it will help him bring down his expenses! But is never will! Because the politician is there for his own vested interests.

So that is inflation for each one of them!


This entry was posted on Saturday, May 3, 2008 at Saturday, May 03, 2008 and is filed under , . You can follow any responses to this entry through the comments feed .


yuo may also include what it is for an entrepreneur, and how inflation in our country is for other countries. may be a share holder can also be included..

May 4, 2008 at 11:14 AM

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I study at European Business School, Oestrich-Winkel. The opinions expressed here are my own, and neither European Business School, Oestrich-Winkel nor any other party necessarily agrees with them.