1 Mazugul

Essay For Inflation

(560 words)
OUTLINES:

  • INTRODUCTION
  • LEADING CAUSES OF INFLATION
  • FRAGILE ECONOMIC POLICES
  • HOARDING, DISHONEST ATTITUDE OF TRADERS
  • STEPS TO CHECK INFLATION
  • CONCLUSION

Inflation refers to a continuous, general increase in the price of goods and services. Rise in prices is called inflation. Inflation at very fast rate is Hyper-Inflation, medium is Strato-Inflation and low lever is Creeping inflation. During the recent years the rise has abnormal and it has endangered the stability of our economy nationally and individually. In Pakistan inflation has become an
unending disease to our economy. Once a state is caught in the circle of inflation then it will be difficult for that state to get rid of it.

There are various factors that contribute to the rise in prices. Some are natural factors like unfavorable weather conditions which affect the food production and lead to the shortage of commodities in the market. With more money chasing fewer goods, the prices take to the wings. Besides this natural problem there are man-made problems like hoarding which contribute to the rapid increase in prices. The trading community which senses a shorting of certain commodities, especially the essential commodities, they resort to large scale hoarding. They release the hoarding products after increase in the prices and make a neat margin over
their investment in the hoarded products. They get so much profit but it waters inflation.

The rise of prices in Pakistan can also be attribute to the despicable acts of traders. Their only motive is to get maximum profit and so they try to charge lots of money from the customers as much as possible. This has created a class of people who are becoming richer day by day and the other class is becoming poorer. Hoarding is also playing a bad role in escalation of prices in the commodities

One of the most important reasons for inflation is the deficit budgeting. In order to cover the gap Pakistan has been printing more paper currency because foreign aid and taxes can not cover up the deficit. Therefore there will be greater circulation of paper money. There will be hike in prices of domestic used products as the purchasing power of the people has increased. Wrong taxation policy has also been responsible for the rise in prices. The hike in taxes results in greater desire to avoid taxes. Thus public takes wrong way of not paying taxes and there will be escalation in prices.

Pakistan’s government has been making a great effort to check this inflation. The rate of interests has been increased in order to encourage savings and withdraw of currency. The government is making efforts to increase industrial outputs so that the level of consumption is leveled with that of output. But unfortunately the government has not met
with success in getting rid of inflation.

The rise in prices goes non-stopped, some suggest that there should be demonetization of currency, but the government
thinks that it is an irregular method and will create doubts in the minds of the public about the stability of the government. The rise in the prices of petrol has affected the prices in our country. Pakistan is not producing more than 20% of its total requirement of oil. So we have to import a huge amount of oil every year. Moreover no step has been taken against the traders who are
mainly responsible for unreasonable rise in the prices.

 BY:

SANJRAN GICHKI

 

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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.

Current situation

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

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