look news india
This inflation affects the common man and especially the salaried people because inflation increases first and wages increase later. In the last 9 years alone, the price of wheat has increased by 53%, pulses by 56%, Basmati, ghee by 70%, vegetables by 45%, sunflower oil by 41% and so on in the prices of other commodities which are used The common man has increased. Although price increases have occurred throughout the world, they have occurred at a slower pace in developed countries than in developing countries, especially those with large income inequality. Its rate in India has been above 6% per year, while the corresponding income has not increased by 6% per year. Income inequality has also increased rapidly in these years. According to an estimate, between 2016 and 2021, the income of the bottom 20% people has decreased by 20%, while the income of the top 20% people has increased by 20%. Stopping this rising inflation has become a big challenge for the government. Rising prices and falling prices are two notable historical events in the twentieth century. After 1927, prices began to fall in countries around the world. It fell first in England, which was the most developed country in the world at that time, and then in other countries. The decline started first in industrial goods and then in agricultural and other goods. The result was that due to falling prices, manufacturing units started losing profits and closed their factories, leading to unemployment across the world.
After World War II, prices began to rise dramatically. In Germany, prices rose to such an extent that people carried money in bags and stuff in their pockets. Falling prices are also not good because it creates unemployment and rising prices are also not good because it creates problems for the common man. It's okay to be still. On both occasions, the Soviet Union was the only country where prices did not fall because they were controlled by the government and prices did not rise after World War II. In Germany, controlling the prices of industrial goods is said to reduce the cost of production of goods by eliminating monopolistic competition. At that time, the cost of advertising used by companies to increase sales was eliminated. To make many products popular among the people, the cost of advertising is many times more than the cost of that product, like soap, tea, tooth paste, polish etc. The cost of advertising is very high. At that time, monopolistic competition was abolished in Germany, thereby eliminating unnecessary competition. Firstly, advertising costs were eliminated and secondly, goods became available much cheaper than when purchased by a single monopoly company.
When the price of one good rises, the prices of other goods also rise to keep prices stable. When the price of one commodity falls, other commodities are also affected. A major reason for the increase in prices in India is the import of petrol and diesel. When the prices of petrol and diesel increase, it increases the cost of transportation and transportation and it becomes necessary to increase the prices of goods. About 85 percent of India's oil requirements are met by imports. In this, the price of most oil has to be fixed in dollars. In 1950, the value of dollar was Rs 4 per dollar, which is now above Rs 83. Whenever the value of the dollar increases, petrol becomes more expensive because now more rupees have to be paid for one dollar. A decline in the value of the dollar may bring down prices, but unless imports of oil or other commodities into India reduce, dollar prices cannot go down.
Let us tell you here that in 1937, the price of one rupee used to be 4 dollars because at that time India used to export more and import less but suddenly in 1950 it was reversed that one had to pay 4 rupees for one dollar and then every year the price of dollar increased. There has been an increase in this. Whenever political parties promise to give free gifts during elections and after winning the elections they start giving gifts like free travel, free electricity and other concessions for women. If they do not have to pay, they will have to recover from the public. Nature of taxes. These taxes are indirect taxes like sales tax. These taxes are payable by everyone and are added to the price. Today, about 60 percent tax is levied on petrol and other oils and the rest is the price. These taxes are imposed by both the central and provincial governments. If taxes are reduced then it can also help in reducing the prices. However, once the prices increase, it becomes difficult to reduce them but it is not impossible but can be reduced.