'Problem in Rising Price of Commodity in World Essay\r'

'India is faced today with wiz of the most critical economic situations. At no some some other time did Indians attestor the horrible phenomenon of spiraling prices as they do today, prices atomic number 18 soaring equivalent rackets and each(prenominal) day 1 finds a pass over in prices of more than or less(prenominal) all essential commodities. largenessary obliges argon doing plenty of mischief and the people of bosom class families atomic number 18 finding it a Himalayan task to make twain ends meet. In a ontogeny economy, prices unremarkably display an upward trend.\r\nBut if prices main tenance uphill persistently, they ca put on great trial to the people. They spare incomplete the rich nor the poor, neither the hitrs nor the consumer. They make a economic activities iridescent and unstable, causing great unrest in the minds of the people. Prices are expressed in name of property. When the rupee or any other currentness buys much less than what it use to, and more is to be paid for a great deal every item, then the problem of ascent prices comes into being. In economic terminology it is know as ‘Inflation’.\r\nWhere the poise amid nones supply on the one hand and goods and services on the other is disturbed, a critical problem a cosmetic surgerys. If money supply increases more than goods and services lendable prices will produce. The fixed-income groups like salaried people, wage-earners and pensioners are the most helpless victims of inflation. As prices rise, their authorized income gets eroded. The surplus dearness allowance which the presidency sanctions from time to time proves of no use to them, because their purchasing power actually goes down.\r\nInflation induces businessmen to invest their money in nonproductive assets like gold and attain whose real worth is non change by rising-prices. High prices in any case adversely affect the exports of the country and distort the balance of foreign tra de. In a developing economy a certain rise in prices in inevitable for at least three major reasons. First, the programmes of economic instruction generate larger study and money incomes and these increase the demand for staple consumer goods and services.\r\nThe new incomes are not proportionately reflected in saving because a volume of the beneficiaries have to spend most of the additional money they get on pleasing unfulfilled carrys. Secondly, the same programmes of economic development as generate the new money incomes push-up the demand for certain goods wanted also by the consumer, such as farming(a) products, fuel, housing materials and the like. A third reason, of which the early two may be looked upon as special cases, is the large increase in currency in emulation and the feat of the law of supply and demand.\r\nUnless the production of staple fiber consumer goods keeps pace with the increase in currency that is rendered inevitable by large scale, gigantic term planning, prices are resound to rise even of the production of consumer goods is maintained at the old train. Numerous factors can be cited to explain price rise in India First, our economic planning has suffered from serious drawback, honest from the beginning. During the various Five-Year Plans, while the public expenditure persistently increased, the production targets were never realized. Secondly, this compel the Government to resort to deficit financing.\r\nThe resulting asymmetry inevitably led to inflation. The Third, major factor responsible for price rise is that collectible to great emphasis laid on rotund industries in our Five-Year-Plans, agriculture and consumer goods industries, which produce the items required by the people, have trustworthy insufficient attention. Consequently, agricultural production has not kept pace with consumption. Fourthly, in an developing economy like ours, the first increases in income always tend to be expended on food articles . In other words, the level of consumption tends to increase with increases in income.\r\nThe cumulative effect is a growing pressure on prices. Fifthly, there is a horrifying increase in population. About ten million new mouths are to be fed every year. Sixthly, there are psychological factors that push up the prices. continually rising prices give rise to rising expectations, with the result that farmers and stockiest tend to hoard more and more stocks, anticipating further increase in prices. Seventhly, there has been very heavy receipts on the publicâ€both tell and indirect. In an underdeveloped country like ours, this adds to the inflationary pressure for number of reasons.\r\n dumb taxes on industries are ultimately passed on to the consumers, thus increasing their cost of living. with child(p) taxation also discourages greater production. defective tax-structure has encouraged tax-evasion and accumulation of black money and smuggling. Eighthly, majority of Indians ha ve no participation consciousness. There is no organized consumer guard to price rise. The Ninth factor is the haywire distribution and marketing system. Last, but not the least, was the international factor, increase of oil prices in the international market.\r\nIn order to form this difficult problem, some drastic travel must be taken. First, the entire dodging of planning should be changed. There should be equal attention on heavy industries and agriculture and consumer goods. Secondly, the mounting governmental administrative expenditure should be drastically curtailed as it is mostly wasteful and non-development expenditure. Thirdly, tax burdens on the public should be reduced. And finally, no hoarder, profit or black marketer should be left with impunity. Unless they are crushed with a heavy hand, the common man is bound to suffer.\r\nOur government is quite conscious of the magnitude and implications of the problem. It has already initiated a number of travel to chec k inflationary tendencies. What we now gather up is a strict enforcement of these steps. Apart from accelerating yield and imposing curbs on money supply, we imply an effective distribution system. We also need the support of the social workers and other public minded citizens to keep a encounter on the unethical practices of shopkeepers.. But vigor can mitigate the situation unless the harvest-feast of our population is checked.\r\n'