Inflation is the rate at which the general level of prices for goods and services is rising and consequently, the purchasing power of currency is falling. The effects of Inflation are huge. And, it does not just affect areas like our salaries and the cost of purchasing a home etc. It hits us from every angle - Food prices go up, transportation prices increase and the cost of various services and goods skyrocket over time. All these factors make it absolutely necessary that you account for the impact of inflation on your long term savings and financial goals.

Average Inflation in India for last 3 years is as follows-

2018 - 4.53%

2017 - 2.49%

2016 - 4.97%

(Source: www.inflation.eu)

Investing in Equity and Equity related instruments refers to the investment in publicly traded shares of companies listed on recognized stock exchanges (in India and overseas) and all such schemes that may have such shares as an underlying holding. It may also involve and not limited to investments in Equity Derivatives and or in unlisted shares of companies that may not be publicly traded. Such instruments may be more tax efficient that traditional investment options.

Investing in Debt markets and instruments involves investment in usually fixed interest securities that may be listed or unlisted. These securities may be in the form of Government Bonds, Corporate Bonds and other State Government Bonds/Municipal Bonds and or Bank Fixed Deposits (Public as well as Private). Tax free bonds are usually issued by central or state government/specialized agencies that do not attract any tax on interest earned. Such instruments may also be more tax efficient that traditional investment options.