RISING PRICES

Prices have been rising steadily since Independence. But they have been rising faster during the last ten or fifteen years.

Rising prices called 'inflation' in economics cause worry to the government and hardships to people. Rising prices upset all estimates of income and expenditure made by the government.

Cost of all government projects, plans and administrative expenditure goes on increasing with the rising prices. For example, a dam which is estimated to cost Rs. 100 crores may cost Rs. 500 crores by the time it is completed. So the government has to provide more money for its projects. To provide more money it has to levy more taxes on people or to print more notes. Both these steps would cause additional burden to the people. Again, both these steps would raise the prices still higher, causing still more hardships to the people.

To mitigate the hardships caused by rising prices, people want more money. Employed people demand higher wages. If the employers do not agree to their demands, they go on a strike. If the employers agree to give more wages or salary, their cost of production increases and this results in still higher prices. More spending by people would almost raise prices. Thus there is a vicious circle. Prices push up costs and costs push up prices.

Is there no way oat? There is. But it requires a strong government to take some strong measures which the people may not like for the time being. Government must put a stop to all salary or wage rises. This would stabilize costs to some extent. Government should stop printing more notes and must reduce its expenditure drastically. This will prevent prices from going up. Production should be increased. For this there should be at least a decade of hard and disciplined work and industrial peace. All strikes and lock-outs should be banned for at least a decade. Lastly, government must take steps to stabilize the prices of food and agricultural products, because in an agricultural country like India, the whole price structure of other products stands on the prices of farm products.

Though people may at first resent these measures, they will appreciate and welcome them when they enjoy the fruits of these measures after a decade or so, when the prices will be stabilized.