How inflation affected the living of the people and their daily activity. From newspaper to vegetables. For MBA, Commerce student its necessary to know that How it affected our lives

1. Inflation Post
Pandemic

2. Inflation
Inflation is crucial to determine one’s purchasing power. In other words, inflation is a
measure that causes the prices of both goods and services to rise over time and
buyers will feel the pinch as it affects their personal finance, particularly spending
and buying habits.
One way of understanding inflation is, for instance, you bought a list of household
essentials last month at an expense of INR 1,000, but this month the price of a certain
food item in the same list has risen and that has led to an increase in the cost by let’s
say INR 1,100. You may be either forced to remove an item from your cart or buy the
product that has the inflated price by paying extra which may affect your monthly-set
budget.

3. How does it works?

4. How is inflation calculated?
There are two indices that are used to measure inflation in India — the consumer
price index (CPI) and the wholesale price index (WPI). These two measure inflation on
a monthly basis taking into account different approaches to calculate the change in
prices of goods and services. The study helps the government and the Reserve Bank
of India (RBI) to understand the price change in the market and thus keep a tab on
inflation.
The CPI, which refers to the Consumer Price Index, analyzes the retail inflation of
goods and services in the economy across 260 commodities. The CPI-based retail
inflation considers the change in prices at which the consumers buy goods. The data
is collected separately by the Ministry of Statistics and Program Implementation and
the Ministry of Labour.
The WPI, which refers to the Wholesale Price Index, analyzes the inflation of only
goods across 697 commodities. The WPI-based wholesale inflation considers the
change in prices at which consumers buy goods at a wholesale price or in bulk from
factory, mandis, etc.

5. Five years of CPI and WPI of Inflation
in India
Here’s a list of the country’s inflation from December 2018 till August 2022 as measured in
both CPI and WPI indices to help you understand the change in price over time.
Inflation Rates in 2022
Inflation Rates in 2021
Indice
s
Sep Aug Jul Jun May Apr Mar Feb Jan
CPI 7.41% 7.00% 6.71% 7.01% 7.04% 7.79% 6.95% 6.07% 6.01%
WPI -
12.41
%
13.93
%
15.18
%
15.88
%
15.08
%
14.55
%
13.11
%
12.96
%
Indice
s
Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan
CPI 5.59% 4.91% 4.48% 4.35% 5.30% 5.59% 6.26% 6.30% 4.23% 5.52% 5.03% 4.06%
WPI
14.27
%
14.23
%
12.54
%
10.66
%
11.39
%
11.16
%
12.07
%
12.94
%
10.49
%
7.39% 4.83% 2.03%

6. Inflation Rates in 2020
Inflation Rates in 2019
Inflation Rates in 2018
Indice
s
Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan
CPI 4.59% 6.93% 7.61% 7.27% 6.69% 6.73% 6.26% * * 5.84% 6.58% 7.59%
WPI 1.95% 1.55% 1.31% 1.32% 0.16% -0.58% 1.81% -3.37% -1.57% 1.00% 2.26% 3.01%
Indice
s
Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan
CPI 7.35% 5.54% 4.62% 3.99% 3.28% 3.15% 3.18% 3.00% 2.92% 2.86% 2.57% 7.59%
WPI 2.59% 0.58% 0.16% 0.33% 1.08% 1.08% 2.02% 2.45% 3.07% 3.18% 2.93% 2.76%
Indice
s
Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan
CPI 2.19% 2.33% 3.31% 3.77% 3.69% 4.17% 5.00% 4.87% 4.58% 4.28% 4.44% 5.07%
WPI 3.80% 4.64% 5.28% 5.13% 4.53% 5.09% 5.77% 4.43% 3.18% 2.47% 2.48% 2.84%

7. Inflation Trend in India
The country’s retail inflation, which is measured by the Consumer
Price Index (CPI), has spiked to 7.41% in September 2022, up from
7% a month ago. The Wholesale price index (WPI) based inflation
data for the month of September 2022 is scheduled to be released
soon. The WPI in August had witnessed a downward trend and
dropped to 12.41% from 13.93% in July this year.
Compared to September 2021, CPI is up at staggering 3.06% from
4.35%.

8. How to beat Inflation
The government, in the past, has announced a series of measures to ease inflation
— cut the excise duty on petrol and diesel, reduce import duty on key raw materials
and crude edible oils, to name a few. On the other hand, one way the RBI tries to
control inflation is by increasing the repo rate (the rate of interest or cost levied
upon public and private banks for borrowing money from the apex bank), in order
to control and supply and demand of goods and services. Simultaneously, the
increase in repo rates compels banks to increase interest rates on loan and deposit
rate.
Hence, it is important to ensure that you’re financially disciplined, not just about
your spending and buying habits but about your savings and investments too.
Choosing the right investment instrument is the one way to remain financially safe,
which not only suits your personal finance needs given the risk you are willing to
take, but also allows your savings to grow enough to beat inflation.

9. Bottom Line
Understanding your financial goals is one of the ways to beat inflation.
 Categorize your financial goals into long-term (10+ years), mid-term (up to five
years), and short-term (less than five years)
 Plan your savings and choice of saving instruments.
 Increase the amount of your savings as per the growth in your income.
Following the suit consistently will not only help you combat inflation or meet the
depreciating value of the Indian currency against the U.S. dollar, but achieve your
financial goals with an optional extra wealth accumulated over time.