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Comment by copper | Hacker News Reader

His numbers are a bit on the high side (I'd probably spend that much for a meal in the food courts at some SEZ), but the basic point is valid: I believe we still see a >10% inflation rate here. For basic food commodities, the rate may be even higher.

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The Times of India reported food inflation last week to be at 15%. That's clearly not sustainable as worker's wages rise significantly slower.

The IMF predictions are pretty amusing[1] too, if you like that kind of thing.

[1]: http://www.tradingeconomics.com/india/inflation-average-imf-...

Not in the IT sector. For the last several years we've seen 20-30% salary increases annually. I would argue it's more due to market conditions and the hiring practices of the big consultancies than inflation, but probably a third to half of that is an inflationary response.

Sure, but the vast majority of Indians are not in the IT sector. These salary increases in IT are great for engineers, but they also work against India as an offshoring destination because of the rising costs.

Yes, exactly. It will be interesting to see what happens in the next 3-5yrs if salary inflation doesn't slow down or reverse and external investment is similarly reduced.

The Bank of India is raising rates to combat inflation, though they have been slow to adjust. Also, commodity prices are rising all over the world. Food is more expensive everywhere.

Agreed. RBI's large response time is a good thing: it was one of the factors that allowed some insulation from the '08 crisis. It's not so much fun when it comes to deposit rates though :)

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