What is Inflation?
Inflation is the rate at which prices of goods and services increase over time. If inflation is 6%, a product costing ₹100 today will cost ₹106 next year.
Why does it matter?
Inflation reduces your Purchasing Power. If your savings are earning 4% interest in a bank account but inflation is 6%, you are effectively becoming 2% poorer every year. To grow wealth, your investments must beat inflation.
Typical Inflation Rates in India
- General Inflation: 5-7% (Household expenses).
- Education Inflation: 8-10% (School/College fees rise faster).
- Medical Inflation: 12-15% (Healthcare costs rise the fastest).