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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.)

A Landmark Step in Medical Waste Regulation

The 1998 rules marked India’s first serious attempt to regulate biomedical waste, laying the groundwork for safer healthcare waste management nationwide.

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The Bio-Medical Waste (Management and Handling) Rules, 1998, were originally published on 27 July 1998 by the then Ministry of Environment and Forests (now the Ministry of Environment, Forest and Climate Change—MoEF&CC), Government of India. These rules were issued under the powers conferred by the Environment (Protection) Act, 1986, to establish a regulatory framework for the management of biomedical waste generated across the country.


These rules have been amended on several occasions, most notably in 2000, 2003, and 2016. The amendments in 2000 and 2003 aimed to address implementation gaps identified during the early years of enforcement.


The first amendment, introduced in 2000, formally established the role of prescribed authorities such as the State Pollution Control Boards (SPCBs) and Pollution Control Committees (PCCs), making them responsible for enforcing the rules within their respective states and union territories. Additionally, municipal corporations, municipalities, or urban and local bodies were tasked with identifying and providing suitable sites for the common disposal or incineration of biomedical waste, both within their jurisdiction and in areas not covered by any municipal body.


Responsibility for arranging appropriate disposal sites was assigned to either the occupiers generating biomedical waste or operators of common biomedical waste treatment facilities (CBWTFs), either independently or in collaboration with others. The local municipal body was also held responsible for making land available to CBWTF operators and for collecting segregated biomedical waste from hospitals and transporting it to treatment and disposal facilities.


Subsequently, the Central Government undertook a comprehensive review of the existing rules with the aim of ensuring more effective implementation and enhancing the entire waste management process—including collection, segregation, processing, treatment, and disposal—in an environmentally sound manner. This review also sought to reduce the negative environmental impact of biomedical waste.


Draft rules were published on 3 June 2015, inviting objections and suggestions from the public within sixty days of publication in the Gazette of India. All feedback received during this consultation period was carefully reviewed and considered.


As a result, the Central Government, exercising its authority under the Environment (Protection) Act, 1986, notified the Bio-Medical Waste Management Rules, 2016, which came into effect on 28 March 2016, thereby superseding the 1998 rules.


The 2016 rules brought about significant changes—expanding coverage, simplifying waste categorisation, and improving disposal methods. Under the 1998 framework, biomedical waste was divided into multiple categories, with waste from different categories being disposed of in four colour-coded bags. This approach often led to confusion among housekeeping and healthcare staff responsible for waste handling, sorting, and storage.


In contrast, the 2016 rules consolidated the system by classifying biomedical waste into just four clear categories, thereby eliminating confusion and making segregation and management more straightforward for healthcare facilities.


I’ll delve deeper into the specific provisions of the Bio-Medical Waste Management Rules 2016 in my next article. Until then, have a pleasant weekend!


(The writer is an environmentalist.)

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