Price Spiral is the increase in the prices of essential commodities. It is a widely discussed issue in the price market all over the world. Price spiral occurs when the prices of goods increase due to supply-side constraints. The production of goods is expanding slowly. It becomes difficult on the part of the people to maintain their daily expenditures. It also occurs as a result of an increase in prices in the world. The current consumption of goods is increasing because of population growth, rising in their price rise. The hike or spiral in essential commodities usually occurs where there is a huge demand for a particular commodity. But it is a regular phenomenon in the country.
Prices of essentials continue to gain almost every day. The impacts of the price hike are manifold. The poor and underprivileged people are the worst victims or sufferers of the price spiral. They find it difficult to pass their days affording food to the family members, due to the raging price spiral. The constant rise in price contributes to the manifold problems of the poor. The country’s economy faces a meltdown for the reason. What we need to do at first is to control the price spiral of essentials. It is a common experience today. For that, we must check the syndicated groups of businessmen who mainly increase the prices of commodities. In a developing economy, prices are bound to arise and there can be no absolute price stability.
The repercussions of inflation are serious. During inflation there takes place a widening of profit gad because the demand is in excess of the supply. The most important reason is the profit motive in man. Some people want to earn money very quickly. They hoard goods and create artificial scarcity of goods in the market. The scarcity of goods provides an opportunity for all sorts of evil practices to thrive. The black marketers, smugglers also contribute to price increase.
The government must take effective steps to grow more food. The government has a responsibility to cheek corrupt practices. Food security must be ensured. Dependency on foreign loans at an exorbitant rate of interest must be decreased. Huge employment generation can also help beat a true price spiral. Price increase must be matched by an increase in the national income in real terms. We must try to boycott a commodity that shows unnatural price rise.