ranjan

In real terms, inflation is the decline in the purchasing power of currency. In India, for example, one can recollect rate of sugar was Rs.5/- to Rs 6/- per kg. in around 1960s. Whereas today it is Rs.40.- and above. Same is also in other segments of the economy. So, it is not the cost is high but the value of currency is going down since the product is the same whereas in money terms, value of Rupee has gone down since more money is being spent now to acquire the same quantity. On the other hand,  production is going down not only due to our more dependency on imported goods which is growing day by day. The rates at which banks are giving loans are becoming costly. Moreover, demand outstrips supply and in order to maintain supply employer has to spend more on labor and materials. Going down of production causes loss of jobs and thus unemployment grows. It is a vicious circle.  While comparing with the other countries, it is visible that all such countries are also facing problems to s