This article discusses the inflation, the current situation, the causes and the means to control inflation in India.
Inflation in India
Inflation refers to the rise in the price of goods and fall in the value of money. Inflation refers to the problem of rising prices.
The problem has been with us for a long time now. The trend of rising prices in India has, in time, aroused dismay, consternation and anger.
It has been witnessed that with the passage of time, the rich have become richer and the poor still poorer. In spite of a bad agricultural year, it is not scarcity that is troubling people so much as the continuing erosion of their purchasing power. Hence, we are nowhere near the goal of an egalitarian society which we had set out to achieve.
Also read:Problem of price rise in India.
The current rate of inflation is alarming. The rapidly increasing prices in India has been a topic of discussion at all levels during these days.
Economists and some other people have been attempting scientific analyses to:
- determine how far the prices have risen,
- why they have risen,
- by what methods they can be held in check, and
- how far those methods can be successfully.
While all this has been going on, people have been patiently suffering, and for all we know, will continue to suffer for a long time.
Causes of Inflation in India
In-spite of the fact that India has witnessed huge economic development in the past 10 years, yet we are not able to control inflation. It is sure that something has gone wrong somewhere. There are many reasons for Inflation in India:
- There has been a lack of a social awareness in general which has prevented the benefits of planned development from percolating to the lowest levels.
- There has been an increase in the cost of living.
- Lack of control and check over government spending.
- Hoarding of essential commodities by greedy traders.
- Inadequate mechanism to control and fix the prices of essential commodities in the marketplaces.
The benefits of government spending does not reach the common man. There are inadequate checks in the government-spending.
It would not, however, be correct to place the blame wholly at the door of the government or the trader. The consumer is no less to blame for the state of affairs. Some consumers allow themselves to be robbed for fear of a precarious supply position and consistently adverse price trends. Such practices not only deprive the country of much-needed resources but also serve as bad examples for those whose who cannot afford to pay such high prices.
How to control Inflation in India?
Inflation can be controlled by close collaboration and effort of both the government and consumer.
Higher Interest rates: Monetary policy can have an effect on inflation. At a time when a country witnesses high inflation rates, the Government often increases the interest rates. High interest rate is a mechanism to control inflation.
Suitable Distribution System: Inflation directly effects the life of the common people. In order to reduce the danger of runaway price increases in the future, it is very necessary that a suitable distribution system should be developed.
Proper Checks: There should be a system for proper checks to ensure that traders does not charge excess money for the commodities.
Control Hoarding: Some traders indulge in hoarding of goods. They create artificial demand for the goods and charge high prices for the goods. The government should ensure that such malpractices doesn’t exist in society.
Price Control: The prices of all the essential commodities of daily use , such as rice, wheat, potato, milk, etc should be fixed and controlled. And adequate measures should be taken to ensure smooth supply of these items.
Buy at Fair Price only: Some consumers allow the greedy trader to charge high prices for essential items. They pay very high prices for fear of inadequate supply in future. This practice should strictly discouraged.
Category: National Issues of India
Essay On The Problem of Rising Prices
Swaroop Rout Essay Over the past several years rising prices have become a chronic malady in India's nationallife. They have given rise to widespread distress, especially among people who are already living at the subsistence level and also among those in the fied income group, vi!., wage earners and the salaried classes."ecause of persistent increases in the prices of the necessaries of life, the number of people living below the poverty line has been steadily increasing. #t one time they constituted $% percent of our population, but now their number has gone up.&onstantly rising prices are lie a fire feeding on itself. #s they erode the incomes of wage(earners, they give rise to labor unrest. That in turn brings down productivity leadingto further increase in prices. Thus, they establish a vicious circle which it becomes problematic to brea. #s the costs of production mount, all schemes of planned economicdevelopment go out of the window and national economy is overtaen by chaos and thrown out of gear.)hat is that triggers off an upward movement in prices* #ccording to eperts, in a growing economy, some increase in prices in inevitable. It is only when such increase becomes abnormal and persistent that politicians and economists feel obliged to sit up and tae notice. Then they try to pinpoint the causes and begin their search for remedial measures to bring the situation bac to normal.The factors which contribute to price rise can be broadly classified as eternal and internal. In the contet of the situation as it has developed in India, we have heard it repeatedly many times that the rise in prices witnessed in the country is in part due to the impact of global inflation. Obviously, we can not do much about global inflation and the impact it has on the price situation in India. "ut we can certainly apply our minds to identifying and controlling or at least mitigating the rigours of the internal factors which may be aggravating the situation.The symptoms of the disease are clear enough. "ut before we start thining of the remedies, we need to form a clear idea of its internal causes also. #ccording to economists, the main culprit in this contet is inflation. In layman's language, it describesa situation in which too much money is chasing too few goods. )e are repeatedly told that money supply in the country has been increasing. This means that the amount of money circulating in the maret has been going up. +aturally enough if it eceeds the value of goods available in the maret, the prices are bound to go up.This indicates a state of imbalance in the economy which may be due to various factors e.g., faulty planning with a wrong order of priorities, inadeuate production of goods most in demand etc. )hen we tal of production in that contet, we have to tae into