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There is hardly a thing or commodity whose price has not gone up in the recent times. Rise in prices has become a common feature in India and the people are reconciled to this fact. Rise in prices is called inflation.
There are various factors that contribute to this rise in prices. Some are natural factors like unfavourable 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.
Compounding this natural problem are other man-made problems like hoarding which contribute to the escalation of prices. The moment the trading community senses a shortage of certain commodities or products, especially the essential commodities; they resort to large scale hoarding. They release the hoarded commodities after escalation of the prices and make a neat margin over their investment in the hoarded commodities. Though the government has the necessary powers to check hoarding it does not have the necessary manpower to contain the despicable acts like hoarding.
Apart from the natural factors and the man-made factors like hoarding that add to the rise in prices or inflation, the government too contributes its bit to the escalation of prices by imposing higher taxes on raw materials and finished products. With the government nature and hoarders adding their bit to the inflationary trends, is it any surprise then that rise in prices has become a common feature in India?
In the recent times the rate of inflation has been hovering around 4 to 5 per cent. This is, of course, the official rate of inflation. But the rising prices in the retail market do not actually reflect this modest rate of inflation as these figures relate to the Wholesale Price Index and have no relation to the exorbitant retail prices.
To keep the prices of essential commodities under control, and within reasonable limits, the Indian government had constituted the Cabinet Committee on Prices and the Special Committee of Secretaries on Monitoring Prices. These bodies monitor the prices and supplies of essential commodities regularly. Apart from these, the Department of Consumer Affairs monitors the prices of 12 essential commodities viz; wheat, rice, sugar, arhar, gram, groundnut oil, mustard oil, vanaspati, salt, tea, potatoes and onions on a daily and weekly basis. Those commodities that are in short supply are imported.
Though the government’s steps to check inflation are laudable, these measures will have a positive impact on the prices only when they are coupled with a massive drive against hoarders, black marketers and anti-social elements. The unprecedented rise in the prices of onions and tamarind in 1999 testifies to the power of the hoarders who can play havoc with the market. Unless hoarding and black marketing are effectively checked, prices will continue to rise.