Problem Rising of Prices in India

Topics: Money, Supply and demand, Inflation Pages: 3 (965 words) Published: August 27, 2013
Problem of Rising Prices in India
Out of the many problems that are facing India, the problem of rising prices is the most intricate. Although it is affecting universally, yet it has rendered the life of the poor impossible to pull on and the number of poor in India is far greater than the rich. So it is the problem of the whole country. Prices of all commodities are rising almost daily. For what you buy a commodity today, you cannot have it on the same price a few days after. The hardest hit on this problem is the salaried class. The businessmen and the traders meet out the problem of dearness by earning larger profits. The labour class too charges high wages and has a low standard of living, so they, too, anyway cope with the rising prices. But the salaries often remain fixed. The rate of increase in dearness allowance is so low that it hardly meets the rate of rising prices. The condition of the salaried class in the private sector is all the more problematic. The Causes of the Rising Prices Are as Follows:

1. Agriculture:
We have ample progress in the field of agriculture and industry but not in proportion to the growth of population. So the supply of things wanted is less than its demand. The result is that the purchasing power of a rupee is going down. In this way, rupee is being devaluated. 2. Inflation:

The government has adopted deficit budgeting. To meet out the deficit of the budget, it takes to printing of more paper currency and having loans from abroad. Consequently there is inflation. The state governments too are in the habit of drawing overdrafts. Inflation and over drafting result in the hoarding of black money which gives rise to prices. 3. Population Growth:

The population is our country is growing rapidly. Growing population surpasses the growth of production in the fields as well as in the industries. Again the problem of demand and supply arises. Supply being less than demand, prices takes a trend of going high. 4. Corruption:

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