What does 'Monetary Poilicy' means?

Let me share the information about the monetary policy in some simple words.

The basic objective of the monetary policy are:
1. Controlling Inflation
2. Encouraging growth
3. Financial Stability

When we hear these terms, they may look bit complicated. Let me say these with some simple stories for each.

See, This is the common question that will be raised. If everyone have enough money with them, then where comes the poverty and problem. Then why can't the government produce (print) more money and pass it on to the people?

The answer is simple. NO! It's because let us assume the cost of 1 Kg of vegetable as 10 INR. Suddenly if government prints more currencies and gives to the people and If everyone is made to be a millionaire, what will happen? Everyone gets ready to pay any amount to buy things. Which means the demand will increase.
What will happen if the demand increases and the supply stays at the same point? Obviously, it leads to the raise in the price. If the same extends for a considerable period, this may leads to a situation such that, people may have to take a basket full of money to buy just 1 Kg of vegetable.

Yes! The value of money will go lesser and lesser. What the government can do to control this inflation??? This is a big question. Let me say that in the next part...



Disclaimer:
All the content mentioned above are my own understanding about the article 'MONEY KUMAR and Monetary Policy' relaesed by RBI on November, 2007.

Correct others but don't Compel

The way of education in our country is always this way. Teachers teach and students should learn. I won’t say that it should be in vice versa. My point is that, the staff expects the students to go in the same way as they wanted. They are fully clutched without any freedom. It gets reflected almost till their lifetime. Even at the work place, the boss/superior minds less about their subordinate.

Is this a healthy sign? NO is my rock solid answer. Let me say it with a story:

There lived a nice old gentleman named Rohit. He is very kind and lovable. He is living alone in his house with his pet dog. He plays, sleeps and spends alomost his complete spare time with that dog. One day that dog falls ill which makes him very upset. The only living creature which spends most of its time with him is completely down. He takes his pet to the veterinarian. The doctor recommended him to take it to one another specialist for the kind of disease the dog is affected. “But the money for the treatment would be bit high”, he said.

But Rohit is ready to spend, to make his pet back to normal. The treatment started. The specialist recommended a kind of tonic which has to be given to the dog daily. Though it’s his own, beloved pet, he finds it very difficult to make his pet to take the medicine. He is very upset the way his pet avoided the medicine. At worst case, he even tied the dog and poured the medicine and made it to drink. Though he is not willing to do so, he feels that he has no other go to save his loved one.

On the third day, by the time when he is fighting with his pet to make it drink, accidently, the tonic bottle slips from his hands and went into pieces. The tonic spills on to the ground. Rohit pressure and sorrow sneaks up. But to his surprise, the dog licks the spilled tonic and went away to its place

That’s the end of this story. The moral is this, though you are the master, everybody has their own way of doing things. The dog’s nature is to lick its food. It doesn’t know whether it’s a food or medicine.

Anywhere it may be, be it school or office, if we want to force others, even if it is for their own well-being, that will break not just the relationship but many. So it’s least matter how they do things, what matters most is what they do and it’s real outcome. So Correct others but don't compel them to do what you want.