A Personal Insight into Price Hikes
In July last year, a pack of ghee at home cost ₹3,146. This year, the same product costs ₹3,990, a staggering 27% increase in just one year (see image below). Most people don’t track price changes over time, so these jumps often go unnoticed. This experience highlights a harsh reality: inflation is a hidden tax we all pay, often without realizing it.
The Third Tax You Didn’t See Coming
We’re all familiar with direct and indirect taxes. However, inflation acts as a third, invisible tax-one that silently erodes purchasing power. While we may be aware of paying income tax or GST, inflation quietly reduces what our money can buy. Unlike traditional taxes, there’s no bill or receipt for this one.
Your Salary Isn’t Keeping Up
In many cases, salaries and incomes don’t increase at the same pace as inflation. This means that each passing year can potentially reduce your actual standard of living unless you invest in assets that grow with or outpace inflation. Without proper investments, you’re likely falling behind financially.
The Misleading Nature of ‘Falling’ Inflation
When inflation drops from 10% to 5%, many people feel relieved. However, this doesn’t mean prices are coming down; it merely indicates they are rising at a slower rate. For example, an item priced at ₹100 last year becomes ₹110 at 10% inflation, then ₹115.5 the next year at 5%. Prices still rise; the rate just slows. Only in rare deflationary scenarios do prices actually decrease, and economists usually fear deflation because it disrupts demand and economic growth.
The Real Cost of Living
If your personal inflation rate is closer to 15%, your actual tax burden includes far more than the 30–35% you might estimate from income and GST. Inflation adds another layer, effectively meaning you may be working more than six to eight months a year just to cover taxes and inflation. Meanwhile, large chunks of tax revenue are lost to inefficiencies or are misused through subsidies not all of which are justifiable.
What’s your take on this invisible inflation tax? Have you noticed similar price hikes in your daily life? Share your views in the comments below! If you found this blog useful, don’t forget to SHARE it with your friends.
