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Is the Government’s calculated inflation rate relevant today for you?

No, not much. The weightage of categories in the basket hasn’t been updated for a long time. Our consumption pattern has changed a lot in a brief time. And the Government is not able to keep up.

Also, the weightage given to all categories is very generalised. For example, if you travel a lot, then your fuel expenses would be higher than the 6.84% shown in the above table.

What if you are a vegetarian? Or spend remarkably less on clothes? Your expenses would be low, right? Also, did you know each state has a separate inflation rate, too?

So, yeah, the real inflation rate is different for everyone. The numbers published every month are often irrelevant to you if your lifestyle is different.

If you track each and every expense of yours, you can calculate your own inflation rate. This would give you a better idea of your expenses and help you improve your investment planning.

Check out the Vrid app to automatically track your expenses - available on the Google Play Store.

Link - play.google.com/store/apps/details?id=in.vrid

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