Dr. Priyanka ‘Saurabh’
In a vast and developing country like India, inflation is not just an economic term but a reality deeply embedded in the daily lives of millions of families, directly impacting their income, savings, food, education, and future plans. Recent reports and market trends indicate that prices of daily necessities have increased by 15 to 20 percent since March. Essential products such as edible oil, soap, detergent, coffee, handwash, snacks, shampoo, and pulses have all witnessed a steady rise in prices. Additionally, increases in the prices of petrol, diesel, and gas cylinders have further aggravated the hardships of the common consumer.
Inflation has the greatest impact on middle and lower income groups. These sections have limited incomes, and the bulk of their expenditure is devoted to essential needs such as food, housing, education, and healthcare. When the prices of everyday goods rise, their ability to save diminishes. As a result, families are forced to cut back on necessities or resort to debt.
According to reports, edible oil prices have witnessed the sharpest increase. While prices rose by 3 to 5 percent in June alone, the overall increase since March has reached 20 to 25 percent. India imports a significant portion of its edible oil requirements. Fluctuations in international crude oil and edible oil prices directly affect the Indian market. Geopolitical tensions in West Asia, supply chain disruptions, and rising transportation costs have further contributed to higher edible oil prices.
Another major driver of inflation is the rise in energy prices. Domestic gas cylinder prices have increased by more than 10 percent, while commercial cylinders, petrol, and diesel have also become more expensive. Energy is the backbone of any economy. When fuel prices rise, transportation costs increase. This impact is felt at every level, from farms to markets, factories to consumers, and warehouses to retail outlets. Consequently, the prices of almost all commodities rise.
Today, companies are also under pressure from rising costs. The increasing cost of raw materials, electricity, transportation, and packaging has pushed up production expenses. In such a situation, companies generally adopt one of two approaches: either they raise product prices or reduce package sizes. Consumers often fail to notice that a product available at the same price is now being sold in smaller quantities. In economic terms, this phenomenon is known as “shrinkflation.” It is a hidden form of inflation.
The most visible impact of inflation is seen in the household kitchen. A middle class family’s monthly kitchen budget, which once stood at around ₹15,000, can now reach ₹17,000 to ₹18,000 because of rising prices. This increase may appear modest, but over the course of a year, the additional expense amounts to thousands of rupees. The situation becomes even more difficult for families with fixed incomes.
The situation in rural areas is equally challenging. Rising costs of diesel, fertilizers, seeds, and pesticides have made agricultural production more expensive. Farmers often do not receive fair prices for their produce, while consumers are forced to purchase the same products at higher rates. Thus, the burden of inflation falls on both producers and consumers, while intermediaries in the supply chain and market structures often gain greater profits.
Inflation also has profound social consequences. When essential commodities become more expensive, families first reduce spending on entertainment, tourism, and luxury items. Eventually, the impact extends to education, healthcare, and nutrition. Many families find it difficult to provide nutritious food for their children, which can lead to malnutrition and health issues. Similarly, reduced expenditure on education adversely affects future human capital development.
From an economic perspective, moderate inflation is considered a sign of growth, as it reflects increased demand and production. However, when inflation rises faster than income growth, it creates economic imbalances. This is the concern emerging in the current situation. Wage growth and employment generation are not keeping pace with the rising prices of essential commodities. As a result, real purchasing power is declining.
The Reserve Bank of India and the government take various measures from time to time to control inflation. These include changes in interest rates, reductions in import duties, monitoring stockpiles of essential commodities, and increasing market supply. However, due to global economic conditions, international trade dynamics, and geopolitical tensions, the effectiveness of these measures is often limited.
The current situation requires the government to adopt a multi pronged strategy. Domestic production must be strengthened to reduce dependence on imports of edible oils and other essential commodities. Expanding modern agricultural technologies, improving storage facilities, and enhancing supply chain efficiency are crucial. Hoarding and artificial price manipulation must be monitored closely. A review of the tax structure on petroleum products could also provide relief to consumers.
Consumers, too, have an important role to play. Avoiding unnecessary purchases, maintaining a disciplined budget, prioritizing local products, and cultivating saving habits are essential. Comparing prices through digital platforms can also help reduce household expenses.
Inflation is not merely a matter of economic statistics. It is a question of the living standards, nutrition, education, and future prospects of millions of Indian families. If the prices of essential commodities continue to rise at the current pace, the impact will extend far beyond household budgets and affect the broader trajectory of social and economic development. Therefore, the government, industry, and consumers must work together to find balanced and long term solutions.
Today, the need is to ensure that the benefits of development are visible not only in statistics but also in the common man’s plate, kitchen, and pocket. Unless inflation is effectively controlled, the gains of economic progress will not fully reach the last person in society. The challenge of inflation is not merely a governmental challenge. It is a shared national challenge, and its solution lies in collective effort and responsibility.
(Dr. Priyanka Saurabh, PhD in Political Science, is a poet and social thinker.)
