Price rise is one of the most ticklish current problems. Whenever we go to make some purchases in the market, we learn to our great disappointment that the prices of most of the commodities have risen. And sometimes quite exorbitantly. There are several reasons for this steep rise in prices.
One reason is the shortfall in production. This happens particularly when the country or a part of it is witnessed by floods or famine. Strikes result in fall in industrial production. Sometimes, one feels baffled when one learns that there has been a bumper crop and still there is scarcity of essential commodities in the market. This usually happens due to a number of reasons.
One reason is the defective distribution system. Sometimes, there is over-production of some agricultural product in one State but it does not reach other States for lack of wagons, boxes, etc.
It is generally seen there is surplus production of wheat in States like Punjab and Haryana but this surplus produce is not swiftly transferred to other States. Similarly, the bumper product of apples in Himachal Pradesh does not reach other States.
Another reason for the scarcity of commodities in the market even during times of profusion is the tendency of wholesalers and capitalists to hoard the products and create a scarcity in the market.
There are several other reasons for price rise. Some of such reasons are back market, corruption, faulty taxation system, wastage, expenditure on luxuries, bloated bureaucracy drawing heavy salaries, excessive profit charged by manufacturers on their products, etc.
In order to check price rise, effective steps should be taken and at the same time excessive circulation of money should also be checked. It should be ensured that imports are decreased and at the same time exports are increased.