The Indian economy is severely threatened by the price rise of most of the commodities in the current year of 2013 which put a heavy financial burden on the consumers.
The inflation rate is so high that the budget of the common man is disturbed and many consumers can not even afford some of the food items that are needed for good health as vegetable prices are at a record high in the month of August.
This is the current situation of the economy in India that faces various challenges but continuous price rise of general utility items is a matter of concern for the general populace. Government policies are not effective in controlling the price hike of essential commodities.
Inflation has become a widespread concept in India and the common man has to suffer a lot for this economic condition.
The notion of Inflation is a continual increment in the overall level of prices. Inflation is assessed on the Indian consumer price index. The index is determined by the average price which customers pay in a market for goods and services. It is established by financial experts that price steadiness is a major aim of fiscal strategies of any country.
In India, central banks are quite worried about the present economic scenario which is affected by inflation. Prices of particular items or services may escalate or during downwards trends relative to the prices of others reflect changes in efficiency or demand and supply situations. But when the prices of commodities hike in general it crushes the purchasing power of earnings, increases the cost of living and worsens the real value of savings.
Financial researchers, investors and other institutions carefully watch the trend of price rise and its effect on interest rate. Inflation issue is also worrisome to maintain competitiveness of the home industry in a liberalised business and market determined exchange rate area.
Many people often blame the government for not adopting effective policies to control this troublesome financial condition. Professional view is that, Inflation can be controlled through creating a competitive situation among companies in order to bring quality goods at low-cost.
Salary is another factor to deal with inflation. Every state government is funded adequately to manage the price rise of the vegetables but still common people are unable to cope up with inflation. Especially lower and middle income groups suffer from price hike of all commodities in India.
It is necessary to take good measures and devise suitable financial plans to control the severe conditions which directly hit the budget of the general public. The Government needs to elaborate the discussion with suppliers and cultivators and guide them to work jointly to lower the prices of general food items.
The Government must provide loans and subsidies to cultivators so that they are encouraged to grow more vegetables and other food items. Basically, inflation occurs due to incapability to organize financial policies that fails in demand management.