Essay on inflation in india pdf
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.
Introduces her pdf essay on in india inflation the website
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.
According to classical economists or monetarists, inflation is caused by the increase in money supply which leads to a rightward shift in negative sloping aggregate demand curve. CPI is usually associated with the non-monetary factors. Mild inflation has an encouraging effect on national output. Imagine today, how worse we are!
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.
Custom on inflation essay india pdf in high level
This has created sesay 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 on of not paying taxes and there will be escalation in prices. The rate of interests has been increased in order to encourage savings and withdraw of currency.
In the midst of this output reduction, artificial scarcity of any goods by traders and hoarders just simply ignite the situation. This type of inflation is known as cost-push inflation henceforth CPI. Increase in the price of petrol by OPEC compels the government to increase the price of petrol and diesel. Above all, speculative businesses flourish during inflation resulting in artificial scarcities and, hence, further rise in prices. Prices of commodities are thereby increased.
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 please click for source demonetization of currency, but the government thinks that it is an irregular method inflaation will create doubts in the minds of the public about esaay stability of the government.
It is inflation if the prices of most goods go up. However, slight dose of inflation is necessary for economic growth. An increase in nominal money supply shifts aggregate demand curve rightward. Cost of production may rise due to a rise in the cost of raw materials or increase in wages.
The rise in the prices of petrol has affected the prices in our country. So we have to import a huge amount of oil every year. Moreover esssy step has been taken against the traders who are mainly responsible for unreasonable rise in the prices.