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By:

Kaustubh Kale

10 September 2024 at 6:07:15 pm

Silent Money Killer: Loss of Buying Power

In personal finance, we often worry about losing money in the stock market, dislike the volatility associated with equities or mutual funds, or feel anxious about missing out on a hot investment tip. Yet the biggest threat to our wealth is far quieter and far more dangerous: loss of buying power. It is the invisible erosion of your money caused by inflation - a force that operates every single day, without pause, without headlines, and often without being noticed until it is too late....

Silent Money Killer: Loss of Buying Power

In personal finance, we often worry about losing money in the stock market, dislike the volatility associated with equities or mutual funds, or feel anxious about missing out on a hot investment tip. Yet the biggest threat to our wealth is far quieter and far more dangerous: loss of buying power. It is the invisible erosion of your money caused by inflation - a force that operates every single day, without pause, without headlines, and often without being noticed until it is too late.
Inflation does not take away your capital visibly. It does not reduce the number in your bank account. Instead, it reduces what that number can buy. A Rs 100 note today buys far less than what it did ten years ago. This gradual and relentless decline is what truly destroys long-term financial security. The real damage happens when people invest in financial products that earn less than 10 per cent returns, especially over long periods. India’s long-term inflation averages around 6 to 7 per cent. When you add lifestyle inflation - the rising cost of healthcare, education, housing, travel, and personal aspirations - your effective inflation rate is often much higher. So, if you are earning 5 to 8 per cent on your money, you are not growing your wealth. You are moving backward. This is why low-yield products, despite feeling safe, often end up becoming wealth destroyers. Your money appears protected, but its strength - its ability to buy goods, services, experiences, and opportunities - is weakening year after year. Fixed-income products like bank fixed deposits and recurring deposits are essential, but only for short-term goals within the next three years. Beyond that period, the returns simply do not keep pace with inflation. A few products are a financial mess - they are locked in for the long term with poor liquidity and still give less than 8 per cent returns, which creates major problems in your financial goals journey. To genuinely grow wealth, your investments must consistently outperform inflation and achieve more than 10 per cent returns. For long-term financial goals - whether 5, 10, or 20 years away - only a few asset classes have historically achieved this: Direct stocks Equities represent ownership in businesses. As companies grow their revenues and profits, shareholders participate in that growth. Over long horizons, equities remain one of the most reliable inflation-beating asset classes. Equity and hybrid mutual funds These funds offer equity-debt-gold diversification, professional management, and disciplined investment structures that are essential for long-term compounding. Gold Gold has been a time-tested hedge against inflation and periods of economic uncertainty. Ultimately, financial planning is not about protecting your principal. It is about protecting and enhancing your purchasing power. That is what funds your child’s education, your child’s marriage, your retirement lifestyle, and your long-term dreams. Inflation does not announce its arrival. It works silently. The only defense is intelligent asset allocation and a long-term investment mindset. Your money is supposed to work for you. Make sure it continues to do so - not just in numbers, but in real value. (The author is a Chartered Accountant and CFA (USA). Financial Advisor.Views personal. He could be reached on 9833133605.)

10,000 New Medical Seats: Healing India or Risking Collapse?

India is rapidly expanding medical education without investing in the essential infrastructure and faculty needed to educate students effectively.

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The Union government has proudly announced 10,000 new medical seats, presenting it as part of its grand promise to “heal India”. State governments are quick to claim credit, press releases multiply, hashtags trend across social media, and ribbon-cutting ceremonies are staged for the cameras. Yet beneath all the pomp, publicity, and political fanfare lies a harsh and inconvenient reality — India is rapidly expanding medical education without simultaneously investing in the essential infrastructure and faculty needed to educate students effectively.


But this then brings up the real question: Who will teach these additional students?


The Centre has recently approved 5,023 MBBS seats and 5,000 postgraduate seats under Phase III of its ambitious medical education expansion drive. It claims that this initiative will help address India’s chronic doctor shortage and improve healthcare access in rural communities. However, the reality is far more complicated: most medical colleges — especially government-run institutions — are already struggling to function effectively, lacking enough qualified faculty to provide students with a proper and high-quality education.


If a hospital were to treat more patients without hiring sufficient doctors, it would rightly be condemned as gross negligence. Yet when governments take the same approach with medical colleges—expanding student seats without increasing faculty or resources—it is conveniently and misleadingly labelled as “development”.


Deep rot

A recent survey by the Maharashtra University of Health Sciences exposes an alarming collapse in medical education. Of the state’s 25 government medical colleges, 10 are functioning with less than half of the required faculty. According to the National Medical Commission, 95 per cent staff strength is mandatory for approval — yet Maharashtra barely reaches half of that standard.


Some of the worst-hit colleges include Ratnagiri Government Medical College, which has filled only 11.76 per cent of its faculty posts, with all 18 professor positions vacant. Sindhudurg and Parbhani colleges have 34.12 per cent of their faculty positions filled, while Satara has just 40 per cent of its posts occupied.


In Ratnagiri, not a single eligible candidate is available to assume the role of Dean. This goes beyond a simple shortage — it represents a total administrative collapse.


Private colleges fare no better—they often borrow local practising doctors temporarily during inspections just to demonstrate “compliance”. Both the Centre and the States are aware of this. Yet these inspections continue to be nothing more than an eyewash ritual.


Centre and states

The Centre is focused on announcing new medical seats without ensuring there are enough teachers to support them. States are busy opening colleges without enforcing any real accountability. Regulators, meanwhile, concentrate on approving infrastructure while overlooking the critical shortage of qualified faculty.


This is not healthcare reform — it is the mass production of degrees without doctors.


Worse still, postgraduate medical education is being expanded without addressing the ongoing shortage of undergraduate faculty. MBBS teachers are already stretched beyond their limits, yet they are now expected to train postgraduate residents as well. Who, then, will be responsible for shaping the next generation of specialists — YouTube?


Deadly Shortcuts

When governments cut corners, it is the patients who ultimately pay with their lives. This reckless, politically driven expansion of medical seats threatens far more than academic standards — it poses a direct and serious risk to patient safety. Poorly trained doctors inevitably deliver substandard care, and the first, most vulnerable victims will be ordinary patients in Tier-2 cities and rural hospitals, who place their trust in a system that is failing to properly equip its doctors.


Before issuing another celebratory press release, both the Centre and State governments must confront one simple question: “Will you fill the faculty seats before filling the student seats?”


If the answer is no, stop calling this “nation-building”. Call it what it truly is — a deregulated disaster waiting to happen.


(The writer is a senior journalist based in Kolhapur. Views personal.)

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