Our motherland India at present is faced with a critical economic situation of spiraling prices and inflationary pressure. At no time did the Indians witness the horrible phenomenon of soaring prices as they do today. Prices are rising like rockets and each day one finds a rise in prices of more or less all-essential commodities. Hence, the poor people and the people of the middle class families are finding it a Himalayan task to make both ends meet. Truly speaking, the price situation is worsening and it is now the major national problem, it has eclipsed all other issues before our nation.
As prices are expressed in terms of money, so when the currency buys much less than its value, then the problem of rising prices comes into being. In economic term it is called ‘Inflation’ and it arises if money supply increases more than goods and services. People belonging the fixed-income group like low and medium salaried holders, wage earners, daily labourers, small traders and pensioners are the helpless victims of rising prices.
The problem of rising price has wide ramifications and it is the result of operation of a large number of causes. Numerous factors can be cited to explain price rise in India. First of all, our economic planning has been suffering from serious drawbacks, right from the beginning. During our Five-Year plans, while the public expenditure persistently increased, the production targets were never realized. This forced the government to restore to deficit financing, which led to inflation. Secondly, the major factor responsible for price rise is due to heavy emphasis on industrialization and overlooking of agriculture, which is the backbone of Indian economy. Our previous and present governments appear putting insufficient attention to our agricultural and allied prosperity, which resulted increase of price in cloth, edible oil, vegetables, milk, meat, fish, and other food items. In the third place, the most visible cause of price rise is the phenomenal increase in population. It seems, as if the Indians have promised to adhere to the first position, as the largest populated country of the world. Fourthly, the heavy taxation, both direct and indirect, which discourages greater production, results price rising. Last, but not the least, the increasing of oil price is also a foremost reason of price rise.
The repercussions of rising price are very serious. It brings opportunity for all sorts of evil practices like black-marketing and ill amalgamation. Rich gets richer and the poor poorer. Again due to rising price poverty reaches in the extreme and this results a heavy increase in crime for money. So, our government should take proper steps to check this dangerous communicable disease.