The cost of living is the only thing that seems to defy the law of gravitation; it keeps going up without ever coming down. In the language of economics, it is called inflation. We are making more and more rupees, but less and less money with real purchasing power. Our wallets are getting bigger and shopping bags are getting smaller. Something that cost fifty rupees a few years ago now costs sixty rupees to repair. Anyway, the problem of price hike has reached alarming proportions in Pakistan.
The longer it persists, the more catastrophic it would become. The poor and the middle classes find it extremely difficult to cope with the huge dimensions of this grievous problem. The only way to beat the high cost of living is perhaps to stop living.
“He who will not economize will have to agonize.” Confucius
What is Inflation in Economics?[the_ad id=”17141″]Inflation does rise its ugly head when the prices and the supply of money continue to increase at the same time. There are so many causes of inflation, but the major one are the increase in demand and no corresponding increase in the output of goods and services. As far as the demand is concerned, it may rise due to various economic factors, namely, increase in the supply of money, increase in disposable income, increase in salaries or wages and increase in population. All these factors are fully operating in our country. Besides the deficiency of capital supply, natural calamities like famine, floods, fall in industrial output, reduction in production, etc. also give rise to the price hike. In under-developed countries, inflation and unemployment usually exist side by side.
Income is something you cannot live without or within. Thomson
In Pakistan, inflation started in the early seventies. It was caused by the fall in investment due to nationalization. The necessary rise in salaries and wages further added to the pressure. Despite the efforts and promises of the different governments, inflation has been growing year after year. At present, it is almost 13%. Anyhow, inflation is an economic evil and a great curse for the society. It surely causes uncurable social and moral damages. Society having the high rate of inflation is a loser as a whole. It has diminished peoples trust in the government. Unchecked growth in population has really worsened the situation.
The government has recently announced that magistrates and even ministers will visit bazaars regularly to ensure that there are no price hikes. However, more than visits are required to keep prices in check. Already, rates of many commodities in the market have registered massive increases. The fear is that a further spurt will be witnessed in the coming months, especially during Ramazan. Prices of most vegetables and fruit have risen dramatically over the past few months despite an adequate supply was available and no shortage reported from anywhere. This is a clear case of profiteering by large sections of wholesalers and retailers. The government should take notice of the prevailing situation in markets all over the country and try to enter into some understanding with the representative bodies of the traders on maintaining the normal price level all the year round. Where called for, magistrates should also initiate raids to check prices as well as to maintain the quality of items being sold in the market.
Beware of little; a small leak will sink a great ship. Franklin
It would not be fair to hold the government alone responsible for checking the rise in prices. The public too must play a part through consumer resistance and not let the profiteers to have their way. In this regard, consumers awareness on such issues as price and quality must be raised by the NGOs which are always quite vocal on public issues. This can be done with the help of the mass media so that people may understand why they should allow the shopkeepers to ask for prices higher than the official rates. It should be made sure that every shopkeeper displays the rate list quite conspicuously.[the_ad id=”17142″]
Main Causes of Inflation
The traders and shopkeepers who get involved in amassing unlawful and unreasonable profit should be arrested and awarded severe punishments. The law enforcing agencies should be given absolute authority in this respect. If this is done, prices will surely remain at their correct levels. Unless both the government and the consumers cooperate in this effort, the whole exercise to check the price hike will prove futile.
As there is no simple cause of this huge problem, there is no simple cure. The best remedy is to curb consumption positively, from the habit of saving both at private and public levels and increase local and foreign investment without fail. In Pakistan, inflation has become one of the main problems of our society. Unemployment, poverty, illiteracy, street crimes, suicide attacks, kidnapping, robbery and so many other Vices are directly linked to inflation. The government must take prompt and positive steps to control constantly increasing price hike otherwise massive unrest in the public may be exploited for the revolutionary purpose.
“The truth is, we are all caught in a great economic system which is heartless.” Woodrow Wilson.