In the last few months, Ajay Yadav, 29-year old entrepreneur has seen his life become rather tough. Just a few months ago, Yadav has taken the big step of his life of starting his own recruitment firm JobSmile.

He was rather confident at that stage that he would be able to sail through the initial phase with his savings of a few lakh rupees. "I knew that I would need some time to make my business profitable and earn as much as I did earlier. But this sudden price hike all across the board has upset my calculations completely," Yadav says.

• Inflation, the silent killer

And he has taken some drastic cost-cutting measures. From renting a flat alone, he has moved in with two of his friends. A year back, he paid Rs 6,000 per month as rent. Today the same flat's rental stands at Rs 12,000. "Even the contribution of Rs 5,000 for the house rent sometimes seems too much," Yadav says.

Even his outdoor lunches and dinners, partying with friends and movie expenses are down. He, along with his room-mates now eat meals cooked by a regular cook.

"Now, I have started worrying about things that never bothered me earlier," says Yadav. And he can even recite the prices of most of the grocery items and rattle off the monthly price changes.

Travelling also has become more cost-efficient. On an average, Yadav would drive 600 kms a month. It is down to 30 kms now. "I use trains mostly now. For shorter distances, I use my bike," says Yadav.

Life for the retired is not happier either. Sandhya Kolvankar, a retired bank employee's wife says her household budget is up dramatically, especially grocery bills that are up by 20-30 per cent. To cut expenses, the family has recently stopped buying expensive ready-to-make soups and fruit juices. They own a car but have stopped using it. And they are cutting down on their long-distance vacations.

The price rise is not just matter of concern for middle-class families. Even households with incomes of over Rs 12 lakh (Rs 1.2 million) are feeling the pinch. "I am cutting down on my lavish lifestyle," says Diwakar Singh, 34 years with a household income of over Rs 15 lakh (Rs 1.5 million) annually.

A regular investor in the stock markets and mutual funds, Singh first realised that the inflation is hurting him when the monthly investible amount started reducing. Realising this, he now drives his father's Maruti [Get Quote] 800 to office that provides better mileage. Earlier, he drove a Maruti Esteem. "To reduce costs further, a friend and I try to share our cars, whenever possible," Singh adds.

He has even taken measures to negotiate with his new company, where he joined as a regional manager, to take care of his petrol bills up to a certain limit. A gizmo freak, he owns three mobile handsets and used to change them every 15-20 days.

"I haven't changed one since past month and a half," says Singh. He has cut down his long drives with his wife on weekends. Now they eat out occasionally or watch a movie over the weekend.

Though, the decline in the rate of inflation, by 0.02 per cent to 11.89 per cent has given signs of some stability creeping in, the outlook is still not great. As global investment bank Barclays Capital has recently projected, the inflation could go up to 17 per cent by September. The report also expects another round of fuel hikes - between 10 and 20 per cent later in the year.

All these point towards tougher times for everyone. Time to tighten the belt further...