Biggest worry for a homemaker- Inflation!


'Roti, Kapda ya Makaan', are the basic needs of one’s life but with Inflation in India soaring around 9.5%, sadly all three necessities might soon become unaffordable. Inflation is one such macro variable that affects everyone; however the one person it affects the most is the ubiquitous home-maker, the typical housewife, who has to persistently tinker about with her household budget to adjust to the onslaught of inflation.


What is inflation?

A sustained rise in the prices of commodities that leads to a fall in the purchasing power is called inflation. It is essentially a rise in an index consisting of a basket of goods and services that have weights attached to them.  India uses the Wholesale Price Index (WPI) method for inflation calculation, which measure the change in the average price level of goods traded in the wholesale market.

Its effect on housewives and the economy.

Inflation undoubtedly has a considerable impact on the household expenditure, as it affects the prices of practically all goods consumed and services availed on a daily basis, the most significant one being food. Skyrocketing rates of food articles like wheat and rice, which form the staple diet of India, have adversely affected the household budgets. Also an increase in the prices of other food articles like pulses, cooking oil, fruits, vegetables, milk and milk products are showing an average increase over the years. Even the domestic LPG cylinder which no household can function without now costs more than Rs.400 up from about Rs.250 in 2010. With the petrol prices always on the rise, housewives and other family members are compelled to think twice before taking the car out, and the increase in public transport prices doesn’t make commuting any easier. Due to an increase in inflation and consequent rise in the standard of living, even the domestic help rates have significantly escalated, only to further pressure the constrained budgets.

An increase in the monthly expenses consequentially implies that the household savings at the end of the month will steadily decline. This is dangerous for the economy as we need a certain level of savings to finance investments, which boosts economic growth. The Reserve Bank of India has been aggressively trying to combat inflation, as it has raised the key interest rates 12 times in the past 18 months.

The young and middle aged housewives somehow combat inflation, but it is the older and retired couples, who have only a steady source of income maybe by way of a pension who are hardest hit. For people like them such high inflation means that they will have to considerably compromise on their lifestyle to be able to survive on their limited income.

We can beat it !

We at would advise you to invest your savings judiciously so that inflation does not eat away your hard earned money. Housewives, you should refrain from keeping savings idle in your lockers & Savings bank accounts, it is essential that you maintain just enough liquidity to meet household expenses and invest the surplus savings. You should opt for asset classes which suit your long term goals like gold, which act as a hedge against inflation, debt instruments such as fixed deposits and bonds, with attractive interest rates and Equity for long term growth. Essentially you should evaluate your investment options on the basis of their inflation adjusted returns, so that your assets do not lose value in this inflationary scenario.


A housewife’s job is perhaps more difficult and less enviable than the governments’. Hats off to these Finance minister’s of each family!


By Riddhi Agarwal   
The writer is working with


+1 #2 Rohan 2011-11-25 12:34
A must read article not only for homemakers but also the bread earner.
well done !!
+1 #1 Amish 2011-11-25 12:32
Instead of worrying about inflation its time to start beating it.
A very nice article !!
Perfect timing !!

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