Inflation has become an ever growing problem in our country but our government seems reluctant to address its causes. If big retail stores are allowed to maintain huge storages, there will continue to be scarcity in the market and prices will rise.
INFLATION SIMPLY means rise in prices. This occurs when the demand for a commodity is more than the supply.
But rise in the prices of food grains when production is enough to meet the demand of food grains in the country occurs:
• Due to Hoarders
• Due to Government policies
Hoarders are people who store goods to sell in the future when prices rise.
Who are the hoarders in today’s business environment?
The government is blind to their existence when they are sitting in front of their eyes- big name retail stores are the culprits.
These companies have thousands of stores in the country and for maintaining a continuous supply of products they store them in large quantities which in turn increases the prices of the products.
These companies purchase products directly from the manufacturers and store them in their warehouses. Due to this these products are available in the open market in small quantities only. This creates artificial scarcity of products in the open market where the prices on these products automatically rise. Then these stores give minor discounts comparable to open market to attract more customers towards their stores. They are the one’s benefiting from a scarcity they have been allowed to create.
Indian government is just as responsible for the increasing inflation because of its poor and outdated strategies. There should be some limit fixed on the quantity of food grains these big stores can store.
The government officials do not aim ground level when dealing with such situations. Instead of getting control over the current conditions they are making them worse.
Last year in 2009 India had more rich people than China but that is not a matter of pride because its shows how much income disparity exists in the country. A disparity which is increasing day by day. The government is making richer people richer when they should try to make the poor less so.
If the government can’t stop the inflation in food grain prices they should at least prevent its rise.