After touching remarkable/ high inflation of 12.6 % last year in India, we are now stabilizing at 4.4 % and yet to reach the bottom( according to many market analysts). Many people have no idea how this inflation or deflation will have an impact on economy…! This huge decline in rate of growth always leads to weakening of commodity prices. It’s not only happening in India it’s across the globe. With the decline of economy you can say development / revenue, this will further weakens the inflation rate. In simple, these “decline in prices“can be called Deflation which is exactly opposite of Inflation.

Deflation makes businesses/people to feel less wealthy, they spend less, fall in demand. This lead to drop in price rates and giving them less profit.

I think by this time, you people are thinking how this inflation no will be calculated or else on what criteria these nos depends upon…??

As i told you earlier weakening in the economy will lead to decline in prices. This fall in prices will result in the fall of the companies' profit meanwhile stock quote of those companies will also come down. In some cases people used to go for pledging of their shares,either to improve their business or to widen up their business. By chance this fall continues then these ppl will end up in huge loss which will in turn lead to big fall in stock price which would hurt investors. When the company is in loss/less profit then obviously they think about fire/layoffs/ salary cut which again hurts many employees/workers and their cost of living.

If a person looses his/her job all of a sudden and if he/she is not able to get job any where, due to too many commitments there may be chances of these ppl (weak minds) getting involved in robbery, prostitution, corruption and many more illegal activities. don’t you think it affects our culture/economy and all? .We have already started seeing these types of cases in US countries. If the situation becomes worse, we can see it in India also….! And sometimes its very hard to control, and we all know about our system :(..!

Many say this effect of deflation can be seen for another 2 to 3 quarters (till the end of 2009) then where is the solution for this? Do we really need to face it? I think one key solution for this is policy makers,who need to act quickly and with the hands of government central bank will have to cut the rates aggressively to reduce more damage.


Is it a right time to think about small business....?? We are in tough situations guys, but opportunities will be there as always :) . Learn to accept the challenges of today and prepare for tomorrow. Put Innovation into action, enjoy the prosperity and spread lights on ppl who are on the dark side...!