How Inflation &General Price Rise happens in India

(1) All corrupt politicians &government employees’ collects huge bribes. Some of those are going to invest in Real Estate. Once price increase for real estate,price increase for everything.

(2) Reserve Bank of India printing notes without any restriction. Once those notes are printed,Government Banks distributes thousand of crores of loans,as project loan. Many of those loans never come bank.

(3) Many times,Government Bank are creating loss due to unethical distribution of loans like project loans. To cover those loan,Government &Govt. Companies took loan from such bank.

(4) Thousand of Miles Agriculture &Farming Land &Hundred of Residential is owned by Ministers &Govt. Employees which are totally unused. They are reducing the Supply and price increases. Solution,Implement 1% wealth tax on properties.


(1) Latest Spectrum corruption is latest example. Suppose Telecome minister Raja has NGO or Trust and beneficial companies (Those company who got advantage via Spectrum Corruption) will give donation to trusts of Raja &Other Congress Ministers. Those money will be going to invest in Real Estate in most cases.

(2) Company X has been created by relative of Minister Y. Now company X took loan from State Bank of India worth 1000 Crore. Now Company X declare itself bankrupt and will only pay 200 Crore and rest 800 Crore will be distributed between politicians. Those 800 Crore will be invested in Real Estate in most cases.

(3) Bank XYZ is government bank. It has given loan for 1000 Crore to Company X,which is own by relative of Minister Y. Minister Y decided not to pay 1000 crores,so Bank settle the loan at 200 Crores &it will generated 800 Crore of loss to Bank XYZ. Bank has generated 500 Crores of Loss in that financial year after adding 300 Crore Profit. To cover 500 crore of loass

(3a) Bank XYZ will increase the interest of loans given to Citizens

(3b) Company ABC,which is Government Company ,will take loan worth 10,000 Crore and will pay 800 Crore Interest. So,Bank XYZ now comes to 300 Crore profit.

(3c) Government implement &increase taxes like VAT,Surcharges to cover 800 Crores interest paid to Bank XYZ,which is actually happened because Minister Y decided not to pay loan for Company X.

(3d) This is challenge for RTI activists to find such information about such big project loans. Government Bank even didn’t replies to such RTI applications,which ask information about big loans.


How price of everything increase once price of Real Estate increase.

Answer is –Demand for all the products will not going to increase as per Real Estate Price Increment or in a manner that people can afford Rent or Own House. So,simply to patch up with House Rent price of all the products start increasing.

If rent of house increase 12,000 Rs per year,person needs to increase profit margin to cop with their house rent.


I would like to start with Grosary Shop Association. If shop has market value worth 20 lakh and they are selling 1000 X Figure. Now shop owner will consider 20 lakh and calculate with current Interest Rate with saving account of Government Bank and accordingly set price &profit margin to cop with their daily needs.

So they need to make atleast 10,000 Rs profit with shop considering 6% interest rate and they only have demand for 1000 X figure in their area. So shop owner will associations will slowly start increasing prices.

(1) When Price of Real Estate Increase,there will be first increase in the price of good &stuffs which are in Monopoly,Branded or Natural Products. (Examples are Crude Oil,Gold,5 Star Hotels,Copper,Steel),simply to keep profit and business expansion. There is no Government Control on this or Government do not want to control this.

(2) Once price of Real Estate Increase,rent will be increase slightly for Houses &Shops.

- Example,if shop is vacant but anyone is not ready to pay Rs. 1000 Rent then Shutter of the Shop will remain closed.

- If poor family will come and give Rs. 200 rent then shop-owner is not going to give shop on rent on Rs. 200 to poor family who are living on road. Again There is no Government Control on this or Government do not want to control this.

(3) Once price of Rent Increases,price of all products start increases. There is no Government Control on this or Government do not want to control this.

You can not sell 10. Rs Sandwich in Shop. The same Sandwich you can sell in Rs. 10 on Road including Police hapta or bribe.

(4) For products which have limited supply in India like Raw Food Items (Rice,Grains Etc),only 0.5% people are controlling its price. Those people are mostly wholesalers. Who purchase stuff from Farmers and Sell to General Public. So,once price increased for luxury projects,they will start increasing their profit margin. There is no Government Control on this or Government do not want to control this.

(5) Price of product also depends from where that product has been Sold. Like in Ahmedabad,if you purchase Jeans &Shirts from C.G. Road it costs 3,000 Rs considering price of Show-Room is 1 Crore. Now suppose there is increase of price in shop,Shop-owner-association will increase the price of Jeans on C.G.Road to patch-up with 6% interest income. Demand is the same. Demand is not going to increase as per Real Estate Standards. So,when price of Real Estate Increases,people of cities has to suffer a lot.

(6) Once price increase of Real Estate,there will be demand from Employees to increase their salaries.


Please read following document for more information about Inflation &solution.

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