How Inflation Hurts?
Posted on May 8, 2008 in Business and Finance by Shewli
Inflation means no gain for common man except for few hoarders and investors. Inflation enriches fewer while impoverishing more. They say a little bit of inflation is good for any economy so that business transaction takes place otherwise things would become static.
For the service classes it is a shot on the arm. Whatever hike in salary they might have bargained is outdone by the hike in prices in essential items. Food and oil prices have risen more than one could have expected.
The cost for essential items should have been less but it is almost as high as luxury items or non-essential items. India still imports cereals, in such a situation the taxes levied on food items have been withdrawn and in case of other items the duties have been cut. On the whole it makes no sense and the lame excuses they give that because of rise in global food prices the prices in India are affected.
Given the argument that India has enough, then why are food products being imported? Imports have not stopped and to mollify public anger duties are cut on imports.The blame is put on fuel prices now. The increase in crude oil has led to the hike in transport costs and therefore food products cost more. Food products travel miles to reach markets. Vegetables, cereals etc. come from different states to flood markets and on its way it adds the road taxes and fuel costs. Then why not buy local products which would be cheaper.
Certain states export certain food items while others don’t grow them so imports between states becomes a norm. The marketers hike the prices by hoodwinking the regulation authority and the consumers have to bear the brunt of it.
Crisis always leads to frustration and invention as well. Such is the instinct for survival that people bring drastic changes in their lifestyle to survive. A helpless government watches the rise and does things, which hardly benefit people. Savings come down and in an effort to make things better government can work hard in improving the safety nets for its citizens.
The poor are always left to fend for themselves in an economy that can’t take care of its middleclasses. So whatever subsidies the government intends to provide will always fail to reach the targeted sections because the middle classes and the politicians become a competitor for such opportunities.
The whole scenario is pathetic. Self-help is the only help one can imagine but for how long. No one can survive without exchange of services or goods in any society. This leads to exploitation as the way to survival is open only for the survival of the fittest. But human beings are believed to be superior species. It can take care of itself and others so hopefully survival for the fittest will not be the outcome of such spirally inflation.
Inflation can be so damaging that even life saving medicines can disappear from the market and evil business persons can flood the market with spurious drugs. The old are worst hit because they live on fixed income and there seems to be no silver lining until you weave dreams for a better tomorrow, which seems to elude you even after you over-stretch yourself for the extra income.
Inflation is not happening for the first time and what have the policy makers done to combat inflation due to turbulence in global scenario?
Gas prices are rising day by day. No gas cylinder reaches homes even after two weeks of booking. They are supplied to hotels and car owners who should actually buy cylinders meant for business consumption. Domestic purposes are thwarted by business interests of unethical businessmen and citizens.
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