So Inflation rate in India is in double digit. Is it going down ? Yes, but the question is by how much. I don’t think it will be same as it used to be there in regular year of high inflation rate in summer and gradually lower as monsoon arrives in most part of the India. There has been a steep rise in prices of all the basic commodities within last few months. In the year of 1995 there was same condition of inflation rate in the country. But the situation has changed a lot with the globalization taking places around the world. At that time Indian economy was not open as a result the domestic market consumptions was greater that what we could produce which resulted in opening of the Indian market to FII’s. But today Indian economy is changing and there is enough scope for the prices regulations as a result of market competition. There has been a global rise in the prices of the essential commodities around the world and fall of the stock markets.

The chief causes of increasing inflation are : 1) the desire of everyone to consume goods faster than production and the productivity of labor can’t be increased, and 2) the urge of under-developed nations to industrialize too fast for their capital resources. Indian market cannot remain isolated, it hits more when we have many taxes which are put on the products before they come in the market. In India the tax laws are quite complex which has indirectly affected us in terms of price rise. State and Central governments both put a tax on same product. But many of the state governments are still running under loss, and they are looking toward center. Then what is the usefulness of having a twp level tax regimes. The whole structure is complex and needs to be revisited. The only person who is affected due to high inflation is common man. Now there seems no respite even after the monsoon, as according to experts Inflation is going to be around 7% around the year.