"Inflation is the most regressive form of taxationbecause it hits the poor the most." --Narendra Jadhav, Vice Chancellor,University of Pune.

Inflation is a rise in the prices of a specific set of goodsor services. In either case, it is measured as the percentage rate of change ofa price index.

Food prices are soaring. . . all essential items likevegetables, oil, milk, sugar are getting costlier. Rentals and real estaterates have almost doubled in just a few months in most cities. The real estateprices are at record highs making life miserable, especially for people whohave migrated to cities for jobs.

Inflation based on wholesale prices during the periodJanuary 1998-January 1999 was 4.6 percent, one of the lowest in the world.Today, India's inflation is rising at a fast pace and is set to cross 7%.

The Reserve Bank of India (RBI) on Tuesday hiked its indicative short term policy rates by 25 basis points to tame inflation and inflationary pressure.

The central bank raised the repo rate — the rate at which banks borrow money from the central bank — by 25 basis points from 6.25 per cent to 6.5 per cent and the reverse repo rate — the rate at which banks park their funds with the RBI — from 5.25 per cent to 5.5 per cent.