Inflation As we all Know is the major concern of all Economies.

“My friend had kept Rs.10 Lacs in his safe deposit vault in the year 2005.After five years when he opened his Locker and was shocked to find only Rs.9.50 lacs. Some one had eaten up his Rs.50 thousand. This deficit or reduction in value of money kept idle over a Period of time is INFLATION.”

The Indian economy has come up with tremendous growth after the liberalization of Indian economy.

The opening up of the Indian economy in the early 1990s has increased India's industrial output and given chance to connect with world.

But consequently has raised India’s Inflation Rate. However, present rise of inflation rate in India can be a major point of concern to all.

It is mandatory to introduce reforms by the Indian government to keep the Inflation under control.

However , the impact of Inflation is on the customers.

a) Inflation:-

BY,

Encyclopedia:- “inflation In economics, is continual upward movement of prices.”

Oxford Dictionary :- “ A general rise in the prices of services and goods in a particular country , resulting in a fall in the value of money.”

The Major reason for Inflation to rise is ever increasing Demand of goods and Services with limited supply. This is because Indian economy has to support a huge population with limited resources.

b) Customers:-By,

Oxford Dictionary:- “A Person or an organization that buys something from a shop or Business.”We can also define customers as, “As we understand a customer is you, me or everybody and anybody who wants to but a product Or service in exchange of Money is a customer.”

Categorized into Individuals , Private firms, government bodies and Foreign Clients. Individuals further divided in to self employed sector , Salaried sector and fixed income groups (i.e. retired Persons).

Rise in commodity prices customer ending up paying high:-

Reduction in the actual value of money.

Un necessary shortage of essential commodities

Individuals buy only what is required. Rather than opting for luxuries.

Supply of Money

Price control

Expenditure

YearInflation rate (consumer prices) (%)

2000 6.7

2001 5.4

2002 5.4

2003 5.4

2004 3.8

2005 4.2

2006 4.2

2007 5.3

2008 6.4

2009 8.3

In olden days people use to buy food grains and keep stocks for a year or two so that They used to buy all essential food commodities when prices are low because of fresh cropAnd ample of supply would be there in Market. When the crop ended up or prices started Rising it would not effect them in times of shortage. But, in modern economy government plays a major role in controlling Inflation.

Government introduces various reforms like

Giving Subsidies Government rationing Quotas CRR(Credit reserve ratio) all this is done to protect the poor people and fixed income groups so that they can buy basic essential commodities

Black Marketing in food grains .Investors keep stock piles in godowns and wait for prices to rise SO THAT THEY CAN GET HUGE PROFITS THIS CREATES shortage of goods which inturn increases the prices .

Rising inflation was the most recent ticklish political issue that hit the Manmohan Singh government. But was inflation rising because of price rise in essential commodities.

Also it is because of wrong methodologies used by the government to calculate inflation effect all goods and services in the country.

Onion make customers cry.The most basic food for all class of customers.It has a lot of fluctuation in Prices there is constant demand and market prices are governed by supply at times in a year actually buying onions can make customers cry since price are very High.

Sweet sugar makes life bitter currently the prices of sugar have gone high as good as twice in a year. Yet as a recent statement made by current agriculture minister Mr.sharad pawar that prices would still go high will make life more bitter.

Conclusion:-

Though the current congress govt. claims steady growth in GDP rates.They are not able to control Inflation.The major impact of Inflation is on customers of fixed income groups.

Since, their income is fixed.

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