Rising prices of essential commodities, volatile stock market and opposition parties protests that cause traffic jams are all due to rising inflation. Inflation appears to be the buzz word on the street.
The "common man" as the news channels put it appears to reeling from the effects of inflation. Food prices are on the rise. Officially the figure now stands at 7.52%.
The government is being held responsible for failing to act, I would like to step in at this juncture and make a few points that we need to keep in mind.
Firstly, the government has taken measures to curb inflation, with few changes in policy. But does it not take time for it to effect. This is not a problem with quick fix , so we need to be patient.
Secondly, this is a global phenomenon and every one all over the world is feeling the pinch. The inflation we are experiencing at this is a result of the action of market forces of supply and demand.
At the moment in India the production of food commodities has not increased much in the past few years but what has increased is the population, purchasing power and standard of living. In other words supply has remained stagnant but demand was increased exponentially.
Thirdly, it is true that steel prices have gone up drastically but contrary to common belief cement has not risen by any measure. The price of cement has actually fallen in certain states such as Andhra Pradesh over the last 6 months.
One needs to understand that in countries such as China the food prices have gone up by 23%. Therefore in comparison we are actually doing pretty well.
If we are aiming for 8-9% or more every year, there are going to be consequences that we have contend with and may be higher prices may be one of them.
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